AFFORDABLE CARE ACT

Fill out the form below to determine if your company is at risk of paying penalty fees.


Please enter the number of employees (Full-Time Equivalents) you employ:   

While you're not subject to any penalties you have other options that could lower your cost as well the cost to your employees. Some of these options include:

Split Decision - The goal of a "split decision" strategy is to allow employers to maintain group coverage for their employees who would benefit from employer-sponsored coverage, while allowing other employees who would otherwise be subsidy-eligible to access the Exchange and related subsidies. Ways to accomplish this are:

  • 1) Make coverage unaffordable. The ACA defines affordable coverage as coverage that costs employees, for employee-only coverage, less than 9.5% of their W2 (box 1) incomes. Employer could choose coverage with a richer, more expensive set of benefits which could, in turn, make the cost of coverage exceed the 9.5% threshold for an employee's income.
  • 2) The 39 hour solution. Recent changes in the ACA rules allow employers with fewer than 50 employees to establish their own eligibility guideline as to what qualifies as a Full Time employee. Therefore, you could establish 40 hours per week as your benefits eligibility guideline and reduce select employees to fewer than 40 hours per week, making the employee eligible to apply for Exchange subsidy.

Disband Group Coverage - With the advent of the Affordable Care Act and the subsidies that are potentially available to many employees, some groups will find it advantageous to no longer offer group health benefits. There are many issues that need to be considered prior to eliminating health benefits, such as 1) employee retention, 2) availability of subsidies for all or some employees and 3) cost of coverage if subsidies are not available (most likely your key employees will find qualifying for subsidies difficult). However, in some situations this will be the group's best option.

It's very important to note that if employees go to the Exchange, they'll have to include all of their household income to determine subsidy eligibility. To use this strategy effectively, it is critical to know each employee's household income. Otherwise it is possible that the coverage may be "unaffordable" based upon an employee's W-2, but not when compared to household income.

We Can Help.
We have developed an on-line ACA Survey through which employees can enter their personal information. Once all employees have completed the survey, we can meet with you to determine if one of these strategies will benefit both you and your employees.

Since you have 10 to 25 employees you may be eligible for a tax credit. If the average income of your employees is less than $50,000 (excluding all owners) you could receive a tax credit of up to 50% of the cost of health insurance purchased through the SHOP Marketplace. Additionally, as an employer with fewer than 50 employees, you are not subject to a penalty if you choose not to offer coverage or offer coverage that is not affordable. However, you also have other options that could lower your cost as well the cost to your employees. Some of these options include:

Split Decision - The goal of a "split decision" strategy is to allow employers to maintain group coverage for their employees who would benefit from employer-sponsored coverage, while allowing other employees who would otherwise be subsidy-eligible to access the Exchange and related subsidies. Ways to accomplish this are:

  • 1) Make coverage unaffordable. The ACA defines affordable coverage as coverage that costs employees, for employee-only coverage, less than 9.5% of their W2 (box 1) incomes. An employer could choose coverage with a richer, more expensive set of benefits which could, in turn, make the cost of coverage exceed the 9.5% threshold for an employee's income.
  • 2) The 39 hour solution. Recent changes in the ACA rules allow employers with fewer than 50 employees to establish their own eligibility guideline as to what qualifies as a Full Time employee. Therefore, you could establish 40 hours per week as your benefits eligibility guideline and reduce select employees to fewer than 40 hours per week, making the employee eligible to apply for Exchange subsidy.

Disband Group Coverage - With the advent of the Affordable Care Act and the subsidies that are potentially available to many employees, some groups will find it advantageous to no longer offer group health benefits. There are many issues that need to be considered prior to eliminating health benefits, such as 1) employee retention, 2) availability of subsidies for all or some employees and 3) cost of coverage if subsidies are not available (most likely your key employees will find qualifying for subsidies difficult). However, in some situations this will be the group's best option.

It's very important to note that if employees go to the Exchange, they'll have to include all of their household income to determine subsidy eligibility. To use this strategy effectively, it is critical to know each employee's household income. Otherwise it is possible that the coverage may be "unaffordable" based upon an employee's W-2, but not when compared to household income.

We Can Help.
We have developed an on-line ACA Survey through which employees can enter their personal information. Once all employees have completed the survey, we can meet with you to determine if one of these strategies will benefit both you and your employees.

The good news is because you have fewer than 50 employees (Full Time Equivalents) you are not subject to a penalty if you choose not to offer coverage or offer coverage that is not affordable. However, you have some options that could lower your cost as well the cost to your employees. Some of these options include:

Split Decision - The goal of a "split decision" strategy is to allow employers to maintain group coverage for their employees who would benefit from employer-sponsored coverage, while allowing other employees who would otherwise be subsidy-eligible to access the Exchange and related subsidies. Ways to accomplish this are:

  • 1) Make coverage unaffordable. The ACA defines affordable coverage as coverage that costs employees, for employee-only coverage, less than 9.5% of their W2 (box 1) incomes. An employer could choose coverage with a richer, more expensive set of benefits which could, in turn, make the cost of coverage exceed the 9.5% threshold for an employee's income.
  • 2) The 39 hour solution. Recent changes in the ACA rules allow employers with fewer than 50 employees to establish their own eligibility guideline as to what qualifies as a Full Time employee. Therefore, you could establish 40 hours per week as your benefits eligibility guideline and reduce select employees to fewer than 40 hours per week, making the employee eligible to apply for Exchange subsidy.

Disband Group Coverage - With the advent of the Affordable Care Act and the subsidies that are potentially available to many employees, some groups will find it advantageous to no longer offer group health benefits. There are many issues that need to be considered prior to eliminating health benefits, such as 1) employee retention, 2) availability of subsidies for all or some employees and 3) cost of coverage if subsidies are not available (most likely your key employees will find qualifying for subsidies difficult). However, in some situations this will be the group's best option.

It's very important to note that if employees go to the Exchange, they'll have to include all of their household income to determine subsidy eligibility. To use this strategy effectively, it is critical to know each employee's household income. Otherwise it is possible that the coverage may be "unaffordable" based upon an employee's W-2, but not when compared to household income.

We Can Help.
We have developed an on-line ACA Survey through which employees can enter their personal information. Once all employees have completed the survey, we can meet with you to determine if one of these strategies will benefit both you and your employees.

The Affordable Care Act requires that companies with more than 50 employees (Full Time Equivalents) offer health insurance coverage to all full-time employees that is both affordable and adequate. Affordable means that the employee-only coverage for the lowest cost plan you offer doesn't cost the employees more than 9.5% of their Box 1 W2 incomes. Adequate means that the plan covers at least 60% of the expected overall costs which basically means that the Out-of-Pocket Maximum can't be more than @$6,350 per year. However, the penalties have been delayed until 2015, so you have some options to consider for 2014.

To determine what your penalties could be in 2015, complete the following:

Yes   No

In 2015 you'll pay a penalty of $3,000 per full-time employee per year for every employee who goes to the Marketplace and gets a subsidy. Note: If an employee makes less than 400% of poverty ($43,560) and goes to the Marketplace, they may be eligible for a subsidy.

Yes   No

Since your benefits do not meet the Actuarial Value for the Bronze level, in 2015 you'll have to pay a penalty of $2,000 per full-time employee per year, excluding the first 30 employees. Penalty:


Yes   No

If you decide not to offer coverage in 2015 you'll pay a penalty of $2,000 per full-time employee per year, excluding the first 30 employees.
Penalty:


You will not be subject to a penalty.

CONTACT US

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Health coverage is critical to recruiting and retaining a talented workforce. We can offer your company the kind of solid information, analysis, and guidance that will help you find the best possible solutions for your business.

POINTS TO CONSIDER:

  • Different requirements will apply, based upon the size of each company's workforce.
  • Regardless of the size and nature of the business, every company will need to:
    1. Understand the Affordable Care ACt and its requirements,
    2. Inform and notify employees about the ACA and its deadlines,
    3. Review existing plans, and
    4. Make informed choices to provide optimal employee coverage, avoid costly mistakes and penalties, and take advantage of any tax credits or other forms of assistance.

CONFUSED? STUCK? NEED HELP?

Our licensed professionals are available to answer your questions, assist you in using our Calculators, and help you get the best coverage at the lower cost.

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