CPAdvantage February 2014
Affordable Care Act Reporting
From The Top
By Rob Basso
President, Advantage Payroll Services
Under the Affordable Care Act, employers who have 50 or more full time (or full time equivalent) employees must offer health coverage starting January 2015. Are your clients unsure if they qualify? Are they having trouble tracking this? We can help.
Our new ACA Report, sends your clients all the information they need with no effort required on their part. Starting in March 2014, we will be sending your clients a company overview that will easily and quickly allow them to determine whether or not they meet the ACA threshold at which health coverage must be offered. We’ll also be sending monthly snapshots of each employee which determines their classification under the ACA and whether or not your clients are required to offer them insurance.
Now, there is no need for your clients to manually track employee hours and worry about if they are supposed to be offering health coverage. Let us do the work. Make sure to read the Question & Answer section below for more information or call (800) 440 -9033 x27 with any questions.
Q & A
Q: What is ACA Reporting?
A: Under the ACA, large employers are defined as those who employ at least 50 full time or full time equivalent employees. There are several different methods of determining your standing as well as determining which employees are considered full time under the ACA. Advantage Payroll’s ACA Reporting provides you with a detailed report that analyzes your employee classifications on a monthly basis. This will help determine if you are considered a large employer and if so, which employees you must offer coverage to.
Q: Why does my business need it?
A: Employers need to determine if they are a large employer under the ACA and if so, what employees they must offer coverage to. If your business is considered a large employer under the ACA and does not offer affordable minimum essential health coverage to full time equivalent employees, it will face penalties. If a large employer does offer coverage to all full time employees but it is not considered affordable minimum essential coverage, this too can expose the employer to penalties. Making these determinations requires a detailed, 12 month review of your entire employee base which entails a great deal of time and effort. Advantage Payroll’s ACA Report will drastically simplify this process for you.
Q: What are the penalties?
A: Beginning 1/1/2015, an employer with an average of at least 50 full time or full time equivalent employees may be subject to penalties for not providing any qualified employee health coverage or for providing coverage that is considered as too expensive. Penalties only apply if an employee is eligible to receive a government subsidy for health coverage through the exchanges. If this does occur, an employer is liable for a penalty amount of up to $2000 annually for each FT employee, excluding the first 30 employees. Here is the equation for calculating your potential penalty: (total number of employees in the firm minus 30) x ($2000). There is also a penalty for employers who offer insurance, but still have low-income employees receiving a federal premium subsidy. This penalty is the lesser of the calculation above or $3000 per employee receiving a subsidy.
Q: How can I get the ACA Report?
A: All clients are automatically signed up for this service starting March 2014. Clients who receive this report and decide that they no longer wish to receive it going forward, can opt out of the service by reaching out to their CSR. Each month clients will receive the report that will detail their employee base for the prior 12 months. Clients can opt out of this service or opt in to this service at any time.
Q: What if I own more than one business? Will that affect how I determine my employee count?
A: Owning more than one business may in fact affect how your employee count is determined. The ACA requires employers that are related entities to count employees as if they are employed by a single entity. If there is 80% or more common ownership between two or more related entities, those entities have to be treated as one entity for the purposes of this provision of the ACA. Please inform your Customer Service Representative if this situation applies to you.