What does Obamacare mean for your business?
Keep scrolling to find out!
Check out www.EmployersAndObamacare.com for even more information!
Do you feel like you're drowning in a sea of complicated legal jargon? We're here to help!
Understanding these key terms will help you start sailing smoothly:
- Applicable Large Employer (ALE) – Small employers are not required to offer healthcare coverage to their full-time employees, but ALEs are. So, how do you know if you're an ALE? If you have an average of 50 or more full-time and full-time equivalent employees in a year, you're an ALE for that year.
- Full-time (FT) – Employees who work an average of at least 30 hours a week or 130 hours a month during a year are considered FT for that year.
- Full-time Equivalent (FTE) – Add up all of the hours worked by part-time employees during a month, and divide the total by 120 to determine your number of FTE employees for each month.
If you're confident that your business averages less than 50 FT+FTE employees every year, then read no further! The only part of Obamacare compliance you need to worry about is the Individual Mandate!
If you are an ALE, the coverage you offer needs to meet all of the requirements below in order to avoid penalties.
The lowest premium cost for an employee (excluding their dependents/spouses) is less than 9.5% of their household income, or (since you probably don't know your employees’ total household incomes), less than 9.5% of the individual employee’s pay.
Minimum essential coverage includes any group health insurance plans offered under a specified government-sponsored program or eligible employer-sponsored program, other coverage plans offered in small or large group markets within states, grandfathered health plans offered in group markets, and any other coverage that is recognized by the Secretary of Health and Human Services. Coverage that consists solely of excepted benefits is not considered minimum essential coverage.
The insurance will cover at least 60% of the employee's medical expenses.
- March 23, 2010 - Obamacare officially came into law.
- October 1, 2013 - Exchanges where employees can purchase their own health insurance were opened to the public. It is already mandatory that you notify your employees that these exchanges are open and health insurance is available through them.
- January 1, 2014 - The individual mandate, which requires every taxpayer to have health insurance in 2014 or face penalties in 2015, was implemented.
- 2014 - Large employers (those with up to 50 full-time and full-time equivalent employees) can purchase insurance to offer to their employees through Small Business Health Options Programs (SHOPs).
- January 1, 2015 - Penalties will be assessed by the IRS to any large employers that do not comply with Obamacare regulations.
The biggest decision you'll need to make regarding Obamacare is whether you'll
You will choose not provide insurance and to pay the penalty.
You will choose to provide affordable, minimum essential coverage that is of minimum value to your full-time employees.
You will be required to report to the IRS about the insurance that you did or did not offer. There are five different types of required reporting, and five different types of entities required to report.
So, what exactly is required on each report?
- Name, address, and EIN of the employer that maintains the plan
- Whether the employer enrolled in the coverage through a Small Business Health Options Program (SHOP)
- Months that each employee was either enrolled in coverage or eligible to receive benefits
- Each employee’s tax identification number
- Name, address, and employer identification number (EIN) of ALE
- Year being reported
- ALE’s contact person’s name and phone number
- Certification that qualifying offer was made, by month
- Number of FT and FTE employees, by month
- How much the premium will cost each FT employee, by month
- If any employee’s coverage was affected by a waiting period, by month
- If the ALE had no employees/attendance hours, by month
- Each FT employee’s name, address, social security number, tax identification number, and months of coverage (if applicable)
- Aggregated group’s name and EIN (if applicable)
- Government entity’s name, address, and identification number (if a government entity is reporting on behalf of the ALE)
- Statements must be issued to each employee that have the same information as the reports that are filed with the IRS.
- ALE’s contact person’s name and phone number
- Code that signifies a qualifying offer was made for all 12 months of the year being reported
- Whether the employee is eligible for a premium tax credit or not
For a more in-depth look at how Obamacare will affect your business, check out TimeForge's awesome book, Obamacare: A Handbook for Employers.
Learn more about the book and how to purchase it at www.EmployersAndObamacare.com!
This book helps navigate the confusing maze that Obamacare represents to most business owners. I recommend it as a reference guide for anyone that has employees to help figure out what cant be done or should be done to remain compliant. Great job Anthony and team!
Richard C. Wood
The authors have created an extremely informative and readable manual for navigating the vagaries of one of the prickliest pieces of legislation in this nation's recent history. What is even more impressive is the book's lack of partisan politics in its explanation of policies, regulations, and legislation that make up the Patient Protection and Affordable Care Act (ACA). Throughout the book, the authors and editors have provided clear and understandable graphics to accompany the text. The organization of the book is lucid and attempts (successfully) to answer basic questions concerning the ACA's language, its definitions, implications for employers, as well as its implications for employees. The book is well nigh exhaustive in its discussion of IRS implications for compliance with ACA, as well as for penalties for noncompliance. Beginning with Chapter 2, each chapter concludes with a bulleted review of the chapter's content (a useful feature). The 12th chapter comprises almost half of the entire book; it provides detailed scenarios for eight different sizes and types of businesses. These are presented in a thoughtful and dispassionate manner, although Example #1, a mom and pop store, concludes with a chilling cautionary statement for small businesses: if small companies do not offer employees health insurance, they may well be looking at increases in turnover, as employees leave to find jobs that do provide health insurance coverage. Unspoken, but implicit nonetheless, is the dark prospect for America's small businesses. This is an extremely useful manual for those business owners as they attempt to cope with hellish, often convoluted, and almost indecipherable details of Obamacare. It is highly recommended for those seeking to understand and to navigate an entirely new terrain in our national life.
The [Obamacare] legislation is a sprawl of red tape and confusing regulations that can not only harm your organization, but also put your people at a disadvantage, so it'll pay to be prepared. Resources like Obamacare: A Handbook for Employers that shed some light on the details of Obamacare so you can make better decisions and take the proper action are a must.
While I have every confidence that we can keep the Texas economy strong with our emphasis on low taxes, tight spending and economic freedom, your ability to navigate the details of Obamacare will help your organization stay out of trouble with the federal government.
...I hope you'll stay informed, focus on wellness and keep your people protected with your grasp of the issues.