bake - January 2012 - 16

labor front

Avoid Penalties With Compliance
Like it or not, the new health care reform under the Obama Administration began last year. Many aspects of the new Patient Protection and Affordable Care Act took effect January 1, 2011 — and many more are yet to come. Knowing the rules ahead of time enhances your ability to anticipate and address any employee insurance issues before they can negatively impact business. Make sure you’re compliant to avoid unnecessary expenses and keep proﬁts as high as possible. Read the complete law at www.healthcare.gov. Effective by January 1, 2012 Employers must disclose the value of the health insurance provided for each employee on the employee’s annual Form W-2. This requirement was originally to be effective January 1, 2011, but it was postponed by IRS Notice 2010-69 on October 23, 2010. Starting in 2014 Employer mandate: The bill contains a complex employer mandate requiring some ﬁrms to provide insurance, pay penalties or both. The penalties are based on the number of full-time (or part-timers counted as full-time equivalent) employees, whether or not the ﬁrm offers coverage, and whether or not one or more employees qualify for government subsidies toward the purchase of health insurance. An employee qualiﬁes for a subsidy if his or her household income is below 400% of the federal poverty line ($88,000 for a family of four today). Here are some of the rules:
Source: National Federation of Independent Business

RULES STARTING IN 2014

More than 50 full-time employees. Does not offer insurance. One or more employees receiving premium subsidies. Penalty = $2,000 per full-time employee (minus the first 30 employees).

More than 50 full-time employees. Offers insurance. One or more employees receiving premium subsidies. Penalty = lesser of $3,000 per subsidized employee or $2,000 per full-time employee (minus the first 30 employees).

More than 50 full-time employees. Offers insurance. Has no employees receiving premium subsidies. No penalty on employer.

4. 5.

50 or fewer full-time employees. No penalty. If an employee’s household income is below 400% of the federal poverty line and his or her insurance premium falls between 8% and 9.8% of household income, the employer must offer the employee a voucher (equal to the amount the employer contributes toward an employee’s premium) to purchase insurance in the exchange. An employee meeting these characteristics will not trigger the employer penalties.

Part-time employees’ hours will be converted into full-time equivalents for purposes of these calculations. For example, if six employees each work five hours per week, they will count as if the firm had one additional full-time employee (calculated monthly).

Employers with more than 200 employees will be required to autoenroll employees into the employer’s health plans, though the employee may opt out.

There are extra penalties for ﬁrms who have a waiting period of more than 90 days before employees are eligible for insurance.

16 < JAN 2012 | bakemag.com

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bake - January 2012

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