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The ABCs of the ACA for Employers with 50-99 FTEs
The Affordable Care Act’s (ACA) third open enrollment is underway and there are even more changes to the law this year. The stakes are higher for everyone involved in 2016.
From new, complicated tax forms to increased penalties for noncompliance, the confusion and sense of urgency mounts for business owners across the U.S.
What is the ACA or “Obamacare”?
Under this law, you may be required to provide your employees with a certain level of insurance coverage, and weeding through the requirements can be a daunting task.
Impact is determined by the number of full-time equivalent employees (those who work 130 hours per month or more). However, part-time employees are also part of the calculation, as a fraction, and are included in the overall total.
By January 1, 2016, companies employing 50-99 full-time employees and equivalents will need to comply or face penalties.
Probably the most important step is finding a trusted partner who is knowledgeable about ACA mandates to help you navigate. You’re likely not an insurance expert or lawyer, so look to sources like your payroll provider, accountant, or a certified health insurance broker for example.
RAMW is working to ensure that restaurant owners and operators, and their employees receive information on healthcare developments and enrollment options in a timely and efficient manner. If you have questions about offering healthcare benefits for employees of your DC based small business with less than 49 FTEs through DC Health Link, please contact Jackie Ludden Nardelli, Project Director for the RAMW/DC Health Link Partnership.
The ABCs of the ACA
Becoming compliant before the January 1 deadline will save you from a pretty hard hit in the pocketbook. It’s good to know what you’re up against, but it’s not an easy equation.
How penalties are calculated vary if you don’t offer coverage versus offering coverage that is deemed inadequate or not affordable.
Penalties if you don’t offer insurance:
If an employer doesn’t offer full-time employees insurance, and if at least one full-time employee receives federal insurance subsidies in the individual exchange, the business will pay $2,000 per employee (minus the first 30). Example: a business with 50 full-time employees, two of whom are subsidized, would pay $40,000.
Penalties if you do offer insurance deemed inadequate or not affordable:
If an employer offers insurance and at least one full-time employee receives insurance subsidies, it pays the lesser amount of $3,000 per subsidized full-time employee OR $2,000 per employee (minus the first 30). For a 50-employee company with 14 or more subsidized full-timers, the penalty would be $40,000.
As you can see, the calculations can be confusing and this is just one piece of the ACA puzzle. You can ditch the painful math—and penalties—by complying before the deadline.
Bypass the Red Tape
The ACA is filled with complexities. The penalty calculations alone vividly illustrate that. Let’s say you avoid the penalty pitfalls—but what about all of the red tape you’ll have to cut through to achieve compliance?
There is real time, money and resources attached to reaching ACA compliance. You will face administrative burdens associated with getting all of requirements locked down, not to mention managing employees seeking insurance subsidies in the new individual insurance exchanges.
You’ll need to have a plan to get around the roadblocks as you sort through the regulations, but you don’t have to do it alone.
Comply with Ease
Have your trusted partner do the homework for you, as keeping up with the constant changes and updates can become a job in and of itself.
Consider leaning on a trusted partner to help you navigate the law and reduce your administrative work. With Heartland, you’re not alone, and you won’t have to sort through the complexities by yourself. We provide monthly reporting of full-time employees and equivalents (FTEs), and year-end completion of 1094-C and 1095-C tax forms.
In addition, our HR Support Center offers a single source for critical HR materials including information on laws and policies, job descriptions and downloadable forms. Finally, Heartland offers guidance on ACA-related employment and personnel questions through a toll-free number available in our HR On Demand tool.
We will take the pressure off you right from the start—helping you understand how you’re impacted along with next steps. We have the expertise and tools to help you navigate, allowing you to focus on running your business. Leave the rest to us.