Is your company covered by the Affordable Care Act yet?

Nothing has derailed the ACA train just delayed it.
Nothing has derailed the ACA train just delayed it.

January 1, 2015 has come and with it another level of coverage of the Affordable Care Act has passed. Does your company yet come under the requirements?

Who is covered now?

As of January 1, 2015 companies that have 100 or more full time employees must comply with the provisions of the ACA. This employee count is actually FTEs (full time equivalents) which means that you have to add up all your part-time workers and the hours they work to see if you have the equivalent of full time workers. If that number adds up to over 100 you are still covered. This means you have to be providing affordable care to your full time workers.

Not that simple

Of course this is a complex law so it is not that simple. The definition of affordable is affordable if the employee’s premium contribution toward the employer’s plan does not exceed 9.5% of household income. Additionally, the coverage provided has to be deemed to be adequate, which means the plan’s actuarial value (i.e., the share of the total allowed costs that the plan is expected to cover) is at least 60%. I am not going to get into the details here. Your health insurance broker should be well schooled enough by now to determine that for you. In fact, if you are covered and they haven’t told you this stuff you may be in trouble. Naturally companies that are not providing this coverage are subject to penalties. You can find out more by reading this IRS guidance and this Treasury announcement.

What about next year?

Because the law is complex the Obama administration has delayed various aspects of the law. For example all companies with 50 or more full time employees were supposed to have been covered by now, but this change and companies with 100+ employees just started in 2015. They also changed who has to be counted. Originally the first 30 full-time employees didn’t have to be counted but that was changed to 80 on temporary basis. Confusing huh?
In 2016, companies with 50 to 99 full-time employees will come under coverage. If you are in that category you need to be working with you brokers to make sure you are going to be compliant. DO THAT NOW.
For those of you that have thought that your can avoid compliance by reducing the number of your employees the IRS will be checking on you. Costing people their jobs just to avoid the ACA will result in penalties.

The good news

The good news is that companies that have fewer than 50 employees do not come under the coverage of the ACA, at least they don’t have to provide insurance coverage. But they do have one requirement. They have to provide a notice to all new hires of the availability of healthcare coverage. Basically you tell them what they have so they can evaluate what the government offers or if you don’t provide coverage where they can go to get coverage. You read more about that in my blog Update on the Affordable Care Act.

Other resources

I have written about this several times. I will save you the effort of looking this up by providing these links:

Under 50 Employees? Think you are safe from the ACA? Maybe not!

Learning the ACA One Bite at a Time

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