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Health care reform continues to maintain its frontrunner status on hot issues weighing on the minds of entrepreneurs. Throughout 2013, there seem to be more questions than answers for employers grappling with this confusing legislation. When new guidelines are made available that attempt to clarify the law, more questions arise.
Below are answers to six frequently asked questions about healthcare reform.
Q1: What information must be included on an employee’s W2?
A: The Affordable Care Act (ACA) requires employers to report to the W2 the value of health insurance for each employee. This includes both employer and employee contributions to health insurance costs, but excludes dental and vision insurance under separate policies. Reportable amounts also exclude contributions to Health Savings Accounts (HSA) and employee contributions to Health Flexible Accounts (Health FSA).
Q2: If a company has less than 50 employees, is there a penalty for not providing insurance?
A: There are no penalties for employers with fewer than 50 full-time employees.
Q3: Regarding the Cadillac tax, if a company has a high risk insured pool, does that mean it has “Cadillac plans” even if it offers “Bronze” coverage?
A: Yes, based on current policies, the Cadillac tax is based on the value of the health plan and does not adjust that value for higher age or higher risk groups.
Q4: How will healthcare reform affect staffing agencies?
A: Staffing agencies are treated as employers and are subject to PPACA requirements. Temporary employees of the recruitment company are treated as employees of the recruitment company. If the recruitment firm employs more than 50 full-time employees, they are subject to the larger employer order and penalties.
Q5: If a company’s healthcare coverage period is December 1st to November 30th, is it correct to assume that compliance would not be required until 12/01/14?
A: Yes. Based on the guidelines issued on January 2, 2013, most employers that offer benefit plans and have a plan anniversary other than January 1 must comply with PPACA regulations on their plan anniversary after January 1, 2014. If an employer only offers benefits to a small number of employees, they may have to file a complaint on January 1, 2013. Federal Register Vol. 78 and No. 1 provide additional details.
Q6: If you only offer HSA and the employer does not contribute, does the employer have to pay a penalty for not contributing to the insurance?
A: An employer-sponsored health plan with a high deductible and a health savings account must pass the “affordable” test. That would require an actuarial value of 60% and an employee premium of no more than 9.5% of income to avoid the $3,000 penalty. This applies when an employee buys cover on the exchange and is eligible for a premium subsidy.
These are just a few frequently asked questions about the Affordable Care Act. If you need more information on any questions related to the 2013 Health Care Reform, please do not hesitate to contact us.
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