The deadline is creeping up quickly. If you haven’t kept up with the Healthcare Reform Act and how it will affect business owners, we have the breakdown for you, Q & A style.
Will I have to provide healthcare for all of my employees?
The Affordable Care Act will not require businesses to provide health benefits to their workers, but starting in 2014 larger employers with more than 50 full time employees will face an employer shared responsibility penalty if they don’t make affordable health coverage available to this portion of their staff. Below is a link to a chart which defines exactly how employer responsibility works.
How do I determine how many full time employees I have?
The determining factor for businesses who have a staff of at least 50 employees, is whether these employees work an average of 30 hours or more per week, not 40 as one might tend to assume.
So if we offer health coverage to our full-time employees, we will be free from paying a penalty?
Not necessarily. If you have at least 50 full-time employees and you offer coverage to all or substantially all of your full-time employees, you are still subject to a penalty starting in 2014 if the following situations applies:
- The employee’s contribution amount to the plan exceeds 9.5% of the employee’s household income. This is due to the fact that “an over 9.5% contribution” then classifies the plan as outside of the parameters of being considered affordable.
- The employee’s income is less than 400% of the federal poverty level.
- The employee waives your coverage and purchases coverage on an exchange with premium tax credits.
That seems unfair. How will we know if the employee’s contribution exceeds 9.5% of their household income? We have no way of knowing the household income of each of our employees.
Good point. The IRS has requested comments on a proposed affordability “safe harbor” that will allow businesses to compare the employee-only contribution for your lowest cost plan against the employee’s current W-2 wages (rather than household income, which you have no way of knowing). Final IRS regulations on this safe harbor are expected to be released in the near future.
Our health care plan year begins on August 1 of every calendar year. Does the employer mandate apply to us on January 1 or are we safe until August 1, 2014?
The employer shared responsibility mandate is effective on January 1, 2014 regardless of your health care plan’s calendar year.
Do seasonal employees count towards our 50 full-time employee threshold?
The current healthcare reform package does not require businesses to provide coverage for seasonal employees. Seasonal employees are defined as workers who perform labor or services for 120 days or less during the taxable year. This includes retail staff employed exclusively during holiday seasons.
We hope this information has been helpful to you. Keep checking back for additional information on the Healthcare Reform Act and how it affects your business.
Yet another reason why taking advantage of HH Staffing Services for all your recruiting and employment needs is a smart choice. You won’t have to go through the process of finding and qualifying seasonal help, temporary staff, or part time employees, and you’ll be able to keep your count below 50 full time employees if your business isn’t large enough to absorb the new costs that 2014 will bring.
Are you a business hiring in Tampa, Sarasota, Clearwater, Bradenton or Orlando? Give us a call today and let us partner with you! Your success is our success!