Many of us have heard about the complexities of the Affordable Care Act (ACA) both on the business and personal level. For business owners to successfully navigate the ins and outs of the ACA, it will take a village of trusted advisors. For individuals, knowing how to navigate the penalties in order to protect your family is imperative.
The key is to align yourself with trusted advisors who understand the impact to you, your family and your business and can identify where there may be a deficiency. Sensiba LLP recently hosted a panel discussion that yielded a wealth of information for business owners and individuals. The panel event featured Dina Capaccioli from Pinnacle Brokers, Ursula Behiel from Heartland Ovation Payroll and Bill Abel from Sensiba. These three experts provided information on a business owner’s obligation for insurance coverage and penalties, how your payroll service can track and report vital information and the tax implications for individuals.
The information was so powerful, we wanted to share highlights with you. We strongly suggest you engage with your financial advisor to ensure your business complies with the significant number of ACA rules and regulations.
THE HIGHLIGHTS:
For Employers
- Right now, employers with 100 or more full-time equivalent employees will be subject to a penalty if they fail to offer at least 70% of their full-time employees (and their dependents) the opportunity to enroll in employer-sponsored coverage.
- In 2016, that rule changed. Employers with 50 or more full-time equivalent employees will be subject to a penalty if they fail to offer at least 95% of their full-time employees.
- Coverage must be affordable and provide minimal value.
- Affordable: The employee’s contribution (e.g. payroll deduction) to enroll for self-only coverage does not exceed 9.56% (2015) of the employee’s income from the employer.
- Minimum Value: Plan’s share of total allowed cost of benefits is at least 60% of such costs.
- Employers who fail to offer coverage to at least 70% of their full-time employees could face a penalty of $2,000 times the number of full-time employees.
- Employers who fail to offer affordable minimum value coverage could face a penalty of $3,000 times the number of full-time employees.
- Employers who reimburse employees for health insurance could face a penalty of $100 per person, per day for violation.
For Individuals & Families
- Beginning in 2014, individuals are required to do one of the following:
- Maintain basic health insurance coverage (known as minimum essential coverage) for themselves and any of their dependents. Note that minimum essential coverage does not include workers compensation insurance, disability insurance, dental or vision benefits, long-term care benefits, or Medigap or MedSupp insurance.
- Qualify for an exemption
- Pay a shared responsibility payment (a penalty). You can avoid the penalty if you and your dependents are enrolled in a qualified employer-sponsored plan or other qualifying plans.
- For 2014, there are significant financial penalties for not having qualifying health coverage (or qualifying for an exemption). Be sure to work with your advisors to understand your coverage and the potential penalties you may be impacted by.
We hope sharing this information will help you plan and proactively navigate any penalties or fees related to the ACA. If you have any questions, contact us.