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Employers: Will You Face Penalties Under the ACA?

On February 10, 2014, the IRS released final regulations implementing the employer penalty under the Affordable Care Act (“ACA”). Since there’s just about as much disinformation out there as there is new information that you need to know in order to not be penalized. But don’t let the new changes confuse you. It really comes down to a few main points:
Which employers could face a penalty?
In a nutshell, all applicable employers (those with 50 or more full=time employees) can be penalized for:

• not providing minimum essential coverage to their full-time employees and dependents
• not providing coverage that is affordable and that provides minimum value

What constitutes a “full time employee”?

•  an employee who is employed an average of at least 30 hours of service per week with an employer.
• with respect to a month with 4 weekly periods, an employee with at least 120 hours of service is an full time employee
• with respect to a month with 5 weekly periods, an employee with at least 150 hours of services is an full time employee

When is a policy considered “affordable”?
A job-based health plan is considered “affordable” if the employee’s share of premiums for the lowest cost self-only coverage that meets the minimum value standard is less than 9.5% of their family’s income.
In other words, if your share of your premiums for a plan that covers only you (the employee)–not your family–is less than 9.5% of your family’s income, the plan is considered affordable.
What is an official “offer of coverage”?
The offer can be made electronically. An employee’s election of coverage from a prior year that continues for every succeeding plan year unless the employee affirmatively elects to opt out of the plan constitutes an offer of coverage for purposes of the employer penalty provisions.
My business is exempt. Can I offer health insurance, anyway? 
Offering benefits like health insurance is a great way to ensure that your business is attracting the best possible employees. Many employees would rather work for a small company, where they can have a greater impact, but are often deterred by lack of benefits that big companies offer, like health insurance, life insurance and sometimes even pet insurance. And being exempt from the group health mandate can actually put you at an advantage when shopping for employee benefits.
Companies that employ fewer than 25 full-time employees and whose average wage is less than $50,000 are eligible for tax credits, which may encourage them to offer health insurance to their workers.  There are many different online calculators that small businesses can use to determine whether or not they are eligible for any tax credits (here, for example). 
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For more information on health insurance and ACA regulations contact:
Mike Fields
Benefits Consultant
2237 Lancaster Pike
Shillington, PA 19607
ph ~ 610-898-6532
mfields@galleninsurance.com