- October 1, 2013: Employee Notification Deadline for health coverage
- October 1, 2013: Individual Marketplace open for enrollment; Spanish version delayed until October 21st
- NEW DATE Mail - October 1, 2013; Online - November, 2014: SHOP enrollment opens, businesses can enroll throughout the year in either SHOP or Private Exchanges. DELAY - Online SHOP registration will not be available until November 2014.
- NEW DATE December 23, 2013: Final SHOP enrollment and payment date for January 1, 2014 active coverage
- January 1, 2014: ACA mandatory individual health coverage starts
- March 31, 2014: Marketplace enrollment deadline for coverage without penalty
- NEW DATE November 15, 2014: Marketplace opens for 2015 enrollment
Starting in 2014, the Affordable Care Act (ACA) will herald in numerous regulations that mainly affect two types of employers, the “Small Employer” with less than 25 employees and the “Large Employer” with more than 50 employees. As an employer with more than 25 but less than 50 employees you must first calculate your full-time equivalency to determine if your business qualifies as a small employer and avoids the "pay or play" provision of the ACA. If you determine your status to be a small employer with less than 50 FTE, you are under no obligation to provide health care coverage to your employees.
Whether you choose to offer health insurance coverage (or not) affects your business model. Its affects your allocation of part-time versus full-time employment, compensation/benefits plan, and employee retention and attraction.
Consult with an attorney, accountant, human resource (HR) consultant, insurance agent, or other business advisors when making decisions regarding health insurance coverage.
The Health Law Guide for Business offers an Employer's Responsibility flowchart to assist the business owner in making a decision to offer coverage, or not.
The Affordable Care Act requires businesses to pay special attention to Employee Retirement Income Security Act (ERISA) regulations. Even though your business may not provide retirement plans, ERISA regulations also cover health care benefits. Check with an attorney to make sure your company guidelines, employee handbooks and other employer communication tools are in compliance. See also section on Whistleblower protections.
- Affordable Care Act of 2010: Q&As Segment 6 (Source: Alabama Extension). Attorneys provide advice on changes you need to make to meet new ACA and ERISA regulations.
Business Decision Points
What are the costs and benefits of offering, or not offering, a small group health plan for your employees? Answer these questions to help determine whether or not to offer a small group health plan that is best for your business, and your employees.
►Talk with your employees about insurance coverage options.
►Is it part of your business culture and strategy to continue offering or begin offering health insurance to your employees? What are the consequences of not having insurance? Get feedback on these questions from those that are impacted by your decision.
►How difficult is it for you to attract and retain employees? What type of insurance will you offer that retains or attracts qualified candidates/employees? Is it needed?
►Talk with insurance brokers/agents about your available options and visit the SHOP Marketplace to see what is available in your state. Seek advice from your tax advisor.
►Assess your industry and competition. How is your competition responding to the ACA? Can you develop a competitive edge through costs, employee retention/attraction?
►Evaluate financial (costs) and non-financial impacts (i.e., HR compliance reporting), now and into the future.
►Set a budget; what can you afford, what can your employees afford?
►Communicate with all your employees, early!
Small Employer Qualifications
To ensure that you meet the 50 full-time equivalent employees or less threshold, use a full-time equivalent calculator such as the Health Law Guide for Business’ online FTE-calculator or contact your tax advisor or accountant.
Combining companies under common ownership. For employers that have multiple entities (such as an owner having several restaurants or multiple businesses) the IRS aggregation rules governing control groups apply to the ACA employer determination. This ruling states that all employees of businesses which are under common control are treated as employed by a single employer. If this applies to your business, read more:
- Employer Mandate and the Controlled Group Rules (Source: Foster Swift Collins & Smith PC Attorneys)
- Controlled Group Rules - What you need to know (Source: Benefits Resources Inc.)
- PPACA Considerations for Controlled Groups and Affiliated Services Groups (Source: Connelly, Carlisle, Fields & Nichols)
- Full-time employees (FT). FT employees work on average at least 30 hours per week or 130 hours per month. When determining the average, use a Measurement Period of not less than 3 months but no more than 12 consecutive months and divide the total hours by the measurement period.For example, an employee has 960 service hours over a six-month measurement period, averaging 160 hours per month. This employee would be classified as full-time since the monthly average is greater than the ACA criteria of 130 hours. FT seasonal employees are to be added to your FT count only if they had more than 120 days of service hours during the measurement period.
- Section 4980H defines the employ criteria as having service hours versus hours worked. Service hours include not only hours when work is performed but also hours for which the employee is paid and/or entitled to payment when no hours are worked (i.e. vacation, paid leave).
- Part-time employees (PT). Hours worked by PT employees are converted to full-time equivalent (FTE) employees by combining all of the hours worked by employees with less than 30 average hours per week and dividing the total by 120. For example, you have 10 PT employees who worked 25 hours per week for a total of 250 weekly hours over the measurement period. To obtain the FTE, multiply the 250 weekly hours by 4 weeks for a total of 1,000 monthly hours. Divide the 1,000 monthly hours by 120 to get your 8 FTE employees. (10 employees * 25 hours = 250 weekly hours * 4 weeks = 1,000 monthly hours/120 = 8 FTE).
- Seasonal exception. Seasonal employees who work full-time for 120 days or less do not affect the full-time count. This ruling may change beyond 2014.
- Ownership Exemptions. When determining hours and wages, sole proprietors, partners in a partnership, shareholders owning more than 2 percent of an S-corporation and any owners of more than 5 percent of other businesses are disregarded, as are their family members. (Source: Health Law Guide for Business)
- Foreign-based employees. Generally, employees working overseas will not have hours of service performed in the United States are not to be included in the full-time calculations.
Regulations Affecting the Small Employer
►Small Business Health Care Tax Credit. As a Small Employer with more than 25 FTE, you do not qualify for tax credits. See IRS Small Business Health Care Tax Credit for Small Employers.
►Small Business Health Options Program (SHOP). Starting in 2014, small employers with less than 50 FTE can purchase health care coverage for their employees through the SHOP Marketplace or maintain their current health insurance coverage, revised to meet the new coverage limits.
►Small Business Requirement for Employee Notification. If you fall within the Fair Labor Standards Act (FLSA) regulations, you must provide current employees notification of your intent to provide or not provide coverage by October 1, 2013. For more information read Small Business Requirement for Employee Notification.
►Tax Rate Changes. Due to ACA regulations, new employee withholding rates were implemented on January 1, 2013. If you are unsure about your current withholding rates, check with your accountant, IRS Notice 1036 or IRS Affordable Care Act Tax Provisions. A net investment income tax was also implemented in 2013.
►New Assessment on Net Investment Income. Beginning January 1, 2013, a 3.8% tax will be assessed on net investment income such as taxable capital gains, dividends, rents, royalties, and interest for taxpayers with Modified Adjusted Gross Income (MAGI) over $200,000 for single filers and $250,000 for married joint filers.
- Obamacare: Tax Ramifications in 2013 (Source: Cray, Kaiser Ltd.)
- Q&A on the Net Investment Income Tax (Source: IRS)
►ACA Whistleblower Provision. The ACA enhances whistleblower protections defined under ERISA, Section 510. The ACA states that employers cannot discharge or discriminate against "any employee with respect to his or her compensation, terms, conditions, or other privilege of employment" because of the employee reports a potential violation of consumer protections (denial of insurance due to pre-existing conditions) or affordability provision (receiving a tax health subsidy). Still in question, is whether this applies to an employer' that reduces staff or hours to avoid shared responsibility provisions. If this is a concern, seek professional advice from an employment attorney.
- The View from Prokauer: Health Care Reform Litigation Risks - The Intersection of ERISA Section 510 and the Affordable Care Act's Whistleblower Provisions (Source: JDSupra Law News)
- ACA Expands Employee Protection for Blowing the Whistle (Source: Benefits Magazine)
- Health Insurance Industry Whistleblowers Receive Interim Final Rules (Source: Katz, Marshall & Banks)
Changes in Health Insurance Regulations
Cost-sharing limitations. Any employer-sponsored group health plan, excluding grandfathered plans, must not exceed the limitations set by ACA section 1302(c)(1) for out-of-pocket costs and deductibles. See EBSA FAQ 12.
- Deductibles. Limitations on insurance deductibles are not to exceed $2,000 for individuals and $4,000 for a family (adjusted annually). The HHS final rule applies to small group plans only, which is determined by state law.
- Employee costs. The maximum out-of-pocket costs (copayments and deductibles) are set for 2014 at $6,350 for individuals and $12,700 for families. This rate will be adjusted annually. The HHS final rule applies maximum out-of-pockets costs to all non-grandfathered health plans.
►Essential Health Benefits (EHB). Individual and small group plans must include services in ten Essential Health Benefits (EHB), unless you have a Grandfathered Health Plan (source: United HealthCare Services).
►Flexible Spending Accounts (FSA). Maximum spending limits have changed for 2013 to a currently cap of $2,500. This will be subject to cost-of-living adjustments. See video on Flexible Spending Accounts for more information (source: Humana) and IRS determination.
►90-Day maximum waiting period. Beginning January 1, 2014, employees who are eligible for insurance coverage will not wait more than 90 days for coverage, or companies will face fines. The IRS issued a Guidance Notice to hold the 90-day waiting period in effect until the end of 2014. Updates may be forthcoming.
►Summary of Benefits and Coverage Disclosure (SBC). Each employee must be provided a SBC about their plan. See example. The forms will most likely be generated by your group health insurer, but check with them for clarification. For more explanation about SBC, see video produced by Catalistconsulting: Summary of Benefits and Coverage.
►W-2 Reporting of Aggregate Health Care Costs. W-2 reporting of aggregate annual costs of employer-provided health coverage is required, unless you have less than 250 Form W-2s in the prior calendar year. Seek advice from your accountant on reporting requirements.
►Nondiscrimination Rules. Although the regulations have yet to be written, it is anticipated that the ACA will prohibit discrimination of providing health insurance that favors highly compensated employees. The regulations most likely will cover highest paid company officers, shareholders who own more than 10% of stock and individuals within the top 25% paid employees. If found to be discriminatory, the fine may be as high as $100 per day per employee discriminated against, until the error is corrected. Stay tuned for more details.
►Transitional Reinsurance Program Fees. Starting in 2014, all employer-sponsored health care plans will be assessed fees for each individual covered under the plan (including spouses and dependents). Employers who are self-insured and insurers of group plans are required to pay these fees, assessed at $5.25 a month ($63 for the year). Rates for 2015 and 2016 are subject to change. Look for these fees to be added to your insurance costs.
►Patient-Centered Outcomes Research Institute (PCORI) fees. PCORI is a nonprofit center established by the ACA to promote the use of evidence-based medicine and practices. To fund PCORI, the ACA imposes a fee on health insurers and employer self-funded plans. The fee will be $1 per average plan participants for the first year after September 30, 2012 and $2 per participant in succeeding years. The fee is due July 31st of each year (See IRS Form 720). Look for these fees to be added to your insurance costs.
►Medical Loss Ratio Rebates. Starting in 2012, your insurance company must spend at least 80% of premium dollars on medical care rather than administrative costs. If your insurer does not meet this ratio, they are required to provide rebates to you the policyholder. How you treat this rebate depends on many factors and may affect taxable income for you and/or your employees. Consult your accountant if you receive a rebate. See IRS Medical Loss Ratio (MLR) FAQs.
►Wellness Programs. Beginning January 1, 2014, the ACA expands the incentives to promote employer wellness programs and encourage healthier workplaces. The proposed rules increase the maximum permissible reward under a health-contingent wellness program from 20 percent to 30 percent of the cost of health coverage, and further increase the maximum reward to as much as 50 percent for programs designed to prevent or reduce tobacco use. See EBSA Fact Sheet, Final ACA Regulations on Workplace Wellness Programs Released (Source: The Bailey Group) and ACA Updates Nondiscrimination Rules for Wellness Programs (Source: ACA Watch).
►Reporting Requirements for Employers. Additional reporting will be required from employers that provide coverage for each individual covered under the plan. First of these reports will be filed in 2015. More information will be provided as reporting requirements are developed.
HR compliance is a major concern of most small business owners according to ADP Research Institute.
►Cadillac Plans. In 2018, companies that provide high-cost group health coverage will be taxed 40 percent of the employee's excess benefits above the annual threshold imposed by the IRS. The thresholds are $10,200 for individual coverage and $27,500 for family coverage (subject to change). The tax is payable by the insurer of the plans, or by the employer if it is a self-funded plan. Adjustments may be made for high-risk professions and older employees.
If you currently offer health insurance coverage to your employees, you can choose to stay with your current plan and work with your insurance advisor or broker to meet new ACA guidelines. Plans that were placed into service prior to March 23, 2010 are considered grandfathered plans. These plans are not subject to many of the ACA law changes and you may still enroll new employees under this plan. However, if significant changes have been made to the policy that reduce benefits or increase employee costs, you will lose the grandfathered status and will need to meet all ACA guidelines.
According to Aetna, if one of the following design changes occurs within your plan, as measured from March 23, 2010, you could lose your grandfather status:
- Elimination of all or substantially all benefits for a particular medical condition.
- Any increase in the employee’s coinsurance percentage.
- A deductible or out-of-pocket maximum increase that exceeds medical inflation plus 15%.
- A copayment increase that exceeds medical inflation plus 15% (or, if greater, $5 plus medical inflation).
- A decrease in the employer contribution towards the cost of coverage by more than 5%.
- Imposition of annual limits on the dollar value of all benefits below specified amounts.
- Reclassifying employees, without justifiable employment reasons, so they become eligible for a different plan.
- Failure to continuously maintain at least one individual in the plan.
In addition, failing to distribute the required grandfather notice to employees will cause a plan to lose it grandfather status.
Unlike other group plans, the grandfathered plans do not need to meet cost-share limits that all other plans must comply with under the ACA guidelines starting in 2014 (EBSA FAQ 12).
Some of the mandates affecting grandfathered plans were implemented in 2010 and more become effective starting in 2014. Work with your insurance provider for clarifications on requirements and effective dates.
- Compliance Checklist for Determining Grandfathered Status (Source: DOL)
- Grandfathered Plan Checklist of Implications for Group Health Plans (Source: Aetna)
- Grandfathered Regulation Table (Source: DOL)
- The Consequences of Losing "Grandfathered" Status (Source: Sibson Consulting)
If you choose to provide health insurance coverage in 2014, you can enroll through the SHOP Marketplace on October 1, 2013. With the delay of the online enrollment option until November 2014, you are to apply for SHOP through paper application or by calling the SHOP Hotline. Work with your broker or agent to complete the enrollment process, see instructions.
To quality for SHOP, you must have an office within the service area of the SHOP and offer the SHOP coverage to all your full-time employees. For federally-funded SHOPs, the minimum employee participation rate is 70% of your FT employees. This may be different in state-run SHOPs. NOTE: Business owners are included in the count for participation rates.
Although the SHOP Marketplace will not fully operational until 2015, you will be able to choose one plan that will provide coverage to all affected employees. In preparation of enrollment, start to gather your information now and use these helpful SHOP guides:
►Acceptance. An employee has a choice to accept or decline your coverage once it is offered. If an employee declines your offer, they can buy coverage in the individual Marketplace. If the coverage offered met the minimum value and was affordable, the employee that declines may not qualify to save money on monthly premiums or out-of-pockets costs on their individual Marketplace plan (See SHOP guidelines). Also, when your employee declines your offer, you are under no obligation to pay a portion of their monthly premiums. However, strategically it may be beneficial to your business to do so. Again, work with your accountant and have a budget.
In a defined contribution health plan the employer provides tax-free contributions to employees to be used toward their health care. The employer can choose to set up one of three contribution plans:
►Health Reimbursement Arrangement (HRA). An HRA is funded solely by the employer and reimburses an employee for medical care expenses incurred by the employee, and dependents, up to a maximum dollar amount for a coverage period. A tax-exempt trust or custodial account is set up with a qualified HRA trustee to pay for qualified medical expenses. HRAs must be integrated with an eligible employer-sponsored group health plan; HRAs for employees purchasing individual market coverage will not qualify. (See IRS Notice 2013-54) . HRAs can be designed to best meet the needs of the employees and employers.
- Health Reimbursement Arrangements (HRAs) - HSA's 1st Cousin (Source: Scott M. Stevens)
- How Health Reimbursement Arrangements Will Work Under the Affordable Care Act in 2014 and Beyond (Source: Segal)
- Health Reimbursement Arrangement Employer Guide (Source: CoreHRA.com)
- How HRAs will Work Under the ACA in 2014 and Beyond (Source: Sibson Consulting)
►Health Savings Accounts (HSA). HSAs are savings accounts established by individuals and their employers. HSAs are used to pay for qualified health care costs. The account is owned by the employee. The employee is responsible for maintaining a balance and determining how to spend the monies. HSAs can only be used with a qualified High Deductible Health Plan (HDHP) that have at least a $1,200 deductible for an individual plan or $2,400 deductible for a family plan. The HDHP must meet the ACA affordability and provide the essential health benefits mandated by the ACA. To offset out-of-pockets costs, the employer can contribute up to $3,300 for individual and $6,550 for family coverage (2014 limits). These funds do not expire and account balances can build.
- Health Savings Accounts (HSAs) ~ Summary/Overview (Source: Scott M. Stevens)
- The Impact of Health Reform on HSAs (Source: Benefits Quarterly)
- HSAs: A Powerful Tool for Covering Clients' Higher Health Care Costs Under ACA (Source ThinkAdvisor)
- Demystifying Health Savings Accounts (Source: Fidelity)
►Flexible Spending Account (FSA). FSAs are employer sponsored accounts that can be used to reimburse participants for qualified medical expenses. Both the employer and employee may make contributions to this account through payment deductions. FSA contributions are pre-tax monies. FSAs have an annual "use or lose it" rule. Under the ACA, tax-free contributions will be limited to $2,500 per employee, per year. UPDATE 10/31 - The IRS issued Notice 2013-71 that effective immediately allows individuals to carryover up to $500 each year in their FSA. This change is not mandatory for employers. Employers may choose whether they implement the change and when to implement it. Because of the change, employees may now be more interested in using FSAs to reduce out-of-pocket costs.
HRA, HSA, and FSA - Changes Under Health Reform (Source: ZaneBenfits)
Should Your Company Choose a Defined Contribution Health Plan? (Source: The Bailey Group)
Employers who make contributions to a HRA, HSA or FSA will not satisfy the minimum essential health benefits requirement as defined under the share responsibility provision. Employers will need to evaluate the different costs and configurations of combining high deductible plans, metal levels plans, no coverage, defined contribution plans and/or health tax credits. Employers can also look at how private exchanges fit with their defined contribution plans. Finally, the plans should also fit with human resource goals.
Private health insurance exchanges are a rapidly growing alternative to the federal or state run exchanges. A private exchange is an online marketplace that lets employees shop for a variety of insurance products and plans, including health, dental, vision, life, auto and home. Through the private exchange, the employer provides a defined contribution that is set aside for the employee's health care coverage. The employee then adds their salary-deferred contributions and selects the coverage options that best fits their needs. The exchange serves as the HR administrators for the employer by managing the accounts and enrollment process.The employer is still eligible for tax deductions and the employee contributions are pre-tax monies.
The private exchange option provides the employer greater control over health care costs. The employer can budget for contribution increases rather the market determining what the increase will be each year. It also provides for greater transparency of the employer contributions. In-house HR costs will be reduce and employee options will be increased.
- Are you Ready? Private Health Insurance Exchanges are Looming (Source: Accenture)
- On Private Health Exchanges, Choice Drives Satisfaction (Source: SHRM)
- Private Health Insurance Exchanges: Alternative Strategies for Employers (Source: Venable LLP)
Employees who are categorized as higher risk may see higher insurance costs since they would be purchasing insurance as an individual, rather within a specified group risk pool. The employer must make sure the coverage provided does meet the affordability requirement for health coverage. Communicating and educating employees about the changes and individual choices will be critical. Work with the exchange to provide education that increases employee health literacy.
Non-profit health insurance cooperatives, called Consumer Operated and Oriented Plans (CO-OPS) are authorized under Section 1322 of the ACA law. They are an alterative to the individual and small business exchanges operated by state and federal governments. The CO-OPs are formed as nonprofits and controlled by and operated on behalf of their members. There are 24 CO-OPs authorized across the United States. CoOportunity Health, based out of Des Moines, Iowa is authorized for Nebraska and Iowa and will open for business on October 1, 2013. CoOportunity Health provides services for:
- Individuals & Families
- Small Groups - PPO & HSA-qualified plans
- Mid-Sized or Large - PPO, Defined-contribution plans
The objective of the CO-OPs is to create a new competitor to help drive down local consumer costs. Profits made by the CO-OP must be used to lower premiums, improve benefits or sustain programs that with enhance the quality of health care to its members. CO-OPs operate under the same regulatory requirements as private insurers.
- Cooperative is entering Nebraska, Iowa health care markets (Source: Omaha World Herald)
- The Consumer Operated and Oriented Plan (CO-OP) Program (Source: HealthReformGPS)
- The CO-OP Health Insurance Program (Source: HealthAffairs)
There are concerns about the long-term viability of the CO-OPs since they are designed to operate in the riskier individual and small business insurance markets. Key will be to find a rapidly growing CO-OP that has a sufficient health provider network to meet your employees' needs.
To avoid many of the sweeping ACA requirements, employers could choose to provide health benefits through a self-insured plan where the employer assumes the risk for employee health care costs beyond the employee's plan contributions. Traditionally large employers with at least 1,000 employees used this option to reduce costs. However, the ACA does exempt self-funded plans from many of the mandates, such as providing the essential health benefits package and paying state health insurance taxes. These exemptions are making self-funded plans more attractive to smaller employers. With a self-funded plan, the employer carries the risk of health care claims directly and manages claim payments as cash flow. To help reduce risk, employers may purchase stop loss insurance to protect from unexpected high claims for individual employees and for the employer.
Self-funded plans are touted to be more flexible for designing a plan that best suits the workforce. They provide employers with past data on employee benefit usage and greater employer control over wellness programs. Self-funded plans also expose employers to increased risks. For example, if company sets their stop loss levels too high, the business may not be able to meet obligations to pay employee claims. Furthermore, the company automatically becomes part of litigation over claims, rather than passing that role onto an insurance provider. Additional staff may be necessary to manage the claims or the employer may need to contract with an independent third party administrator (TPA) to manage the fund and meet ERISA regulations.
- Small Businesses Pursue Health Law "Loophole" (Source: Kaiser Health News)
- Healthcare Reform: Self-funding Pros and Cons (Source: Entrepreneur)
Arguments for and against the applicability of self-funded plans for small businesses vary considerably. On the positive, employers have reportedly reduced their health care costs by 20-30 percent and have greater flexibility to design a plan that fits their needs. Negative concerns center on the increased risk exposure of the small employers for greater cash outlay due to higher than planned claims, too high of stop loss and legal fees. Self-funded employers will also see increased administrative costs and fiduciary requirements that must protect individual rights. Finally, self-funded plans are best suited for a young, healthy workforce that has low usage rates, as compared to families and older employees. Regardless of how healthy employees may be, owners do need to consider employee lifestyle and behaviors outside of the work place. In a self-funded plan, the employer assumes greater risk. If there are significant financial claims, these could lead to the failure of the business. It is recommended that all companies conduct an independent third-party health-risk assessment to assess potential health risks and employer claims risk. Some states are considering legislation that deters small employers from seeking self-funded options.
Employers who preempted the "pay or play" ruling by reducing staff made a lot of headlines earlier in 2013. Their actions were attempts to reduce a portion of their full-time staff to part-time and decrease or eliminate the health coverage requirement. For employers who are interested in maintaining staff and growing their company, some creative options may include:
- Sharing employees within industries that have flexible hours and close proximity (i.e., restaurants, bars, retail).
- Temporary staffing agencies can be an alternative to permanent hires, depending on costs for the service.
- Independent contractors, use only if they meet the IRS Independent Contractor classification.
- Managed use of the part-time, seasonal employee "safe harbor" rules that provide a look-back period of up to one year before mandatory health coverage is needed. This can be extremely useful for businesses with high turnover.
- Separate entities and employees to reduce penalties. Although subsidiaries can function independently with the larger group provided coverage and the smaller staffed subsidiary not covered; penalties would be assessed for the smaller group only. However, aggregation rules may apply and could cause penalties to be incurred for the number of full-time employees in both entities.
4 Strategies for Avoiding Healthcare Reform Penalties for Contingent Employees (Source: Corporate Counsel)
Misclassifying Workers to Avoid Healthcare Mandates Can Backfire (Source: The Staffing Stream)
Keeping track of part-time staff hours will be critical, especially if a business is near the 50 FTE threshold for activation of the pay or play provision. Potential risks include:
- If a part-time employee's hours are not monitored and they "accidentally" move into the 30 or more average hours, they then qualify for health-care. If this employee is receiving a health care subsidy through the individual exchange, you will be charge a penalty for that month, or until the situation is corrected - (Number of employees - 30) x 166.67 per month.
- If you have independent contractors who are determined to actually meet the full-time employee classification, a penalty of (number of full-time employees x $166.67 x number of months affected).
- Leased employees should not be under the obligation of the employer. If the leasing company qualifies as a large employer and they fail to provide their employees insurance, the employer may be obligated.
Questions still remain if staff changes to avoid the pay or play provision fall within the ACA whistleblower provision. If you select this option, consult an employment attorney for clarification.
- The View from Proskauer: Health Care Reform Litigation Risks - The Intersection of ERISA Section 510 and the Affordable Care Act's Whistleblower Provisions (Source: JDSupra Law News)
As a Small Employer with less than 50 employees, you are not required to provide health insurance coverage for your employees. You will however need to comply with the Small Business Requirement for Employee Notification by October 1, 2013. Your employees will then be required to purchase health insurance coverage privately or through the individual Marketplace. For more information about individual marketplace, see Self-Employed.
Information provided here is from a variety of resources managed by government agencies, professionals, organizations, and non-profits. The information is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal or state tax penalties.
There is no implied or intended endorsement by UNL Extension of any website, information, or videos provided within this website. Nor is there any implied endorsement by the creators of the information and videos used within this website to UNL Extension. Use of the information is for educational purposes only and is designed to serve as a starting point for you to further discuss your business options with an attorney, accountant, human resource (HR) consultant, or other advisor who is well-versed in the new health care regulations.
UNL Extension ACA Team
For questions or additional information, email: ACAbizNE@unl.edu
Phone: Marilyn Schlake (402.472.4138); Carroll Welte (402.374.2929); Jim Crandall (308.995.3889); Charlotte Narjes (402.472.1724)
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