Affordable Care Act Update for Employers
Back in July when we blogged about the Patient Protection and Affordable Care Act – more commonly known as the Affordable Care Act (ACA) or, more informally, Obamacare –employers were facing 2014 compliance deadlines. Of course, as most businesses are now aware, the employer mandate provisions of the ACA have been delayed until 2015 (for employers with 50 or more full-time equivalent employees). However, entrepreneurs and small business owners need to be fully informed and prepared for compliance. But with so much political discourse, where can you find practical information?
The U.S. Small Business Administration has a wealth of resources for small business owners interested in learning more about how the ACA will impact their businesses. On the SBA website, you’ll find up-to-date information for employers of all sizes, from the self-employed to those businesses with less than 25 employees, less than 50 employees or more than 50 employees. SBA is offering a free webinar series↗ specifically designed for small employers. Also on the website there is a glossary of key terms , a timeline of the reforms, the full text of the ACA, training materials and even information that is specific to the state in which a business operates.
Though businesses have been given a reprieve in terms of the compliance start date, it is never too soon to get educated.
At a symposium we presented early this year in association with GS Levine Insurance Services, we assembled a panel of experts on the ACA to address the questions and concerns of local businesses.
As a reminder, among the key points raised by our distinguished panelists were the following:
- All employers with at least $500,000 of revenue were required to provide a notice to employees by October 1, 2013 entitled “Notice of Health Care Exchange.” It is a boilerplate notice, provided by the government online, advising employees of certain benefit options and requirements under the ACA. In addition to the original posting to all employees, the notice must be given to all new employees on the date of hire.
- The law applies differently to companies of varying sizes and revenues. Companies with fewer than 50 employees are generally not required to provide health insurance for their employees. The panelists agreed that for small businesses, the cost of health care benefits will likely increase.
- Determining whether the employer has 50 or more employees is, in some cases, complicated. Part-time employees may be treated as full-time equivalent employees. There are special rules for seasonal employees and affiliated groups of employers. Companies should work with their payroll vendors to help determine eligibility.
- Much attention has and will continue to be given to whether a company with more than 50 employees should “pay or play” – i.e., should a company provide benefits coverage to its employees or not provide health insurance coverage and pay the resulting penalties. A financial analysis for each company considering pay or play is an recommended option. For most large companies in Southern California, it will usually make financial sense to keep providing coverage since the penalty for not providing coverage is nondeductible, and uninsured employees will be required to obtain individual policies with after-tax dollars. Health care benefits should be considered from a recruiting, incentive and morale perspective.
- As a result of your relationship with Regents Bank, GS Levine Insurance Services has offered to provide consultative services to our clients. GS Levine has qualification software to assist business owners in navigating what a business must do and by when, among other resources. Please contact your Regents Bank relationship manager for more information.
A great deal about the ACA remains to be explained, learned and digested before it can be fully integrated into business planning, but the time to start is now.
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