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Your Roadmap to Implementing the Affordable Care Act

Last month, “big business” received an unexpected pleasant surprise when the Department of Treasury announced that the health insurance employer mandate in the Affordable Care Act (“ObamaCare”) has been delayed until 2015. While many companies breathed a big sigh of relief and started predicting whether this was just the first step in eliminating this provision completely, now is not the time to just put the Affordable Care Act (the ACA) out of your mind completely.

Here are the things you, as a business owner or manager, need to be thinking about right now, and who you might want to consult with regarding these items:

  • Even though you may not be required to provide health insurance to your employees, if you are voluntarily providing it, the ACA has some rules you need to follow. Are you covering dependents up to age 26? Are you providing proper annual notices to employees about their coverage? Your insurance agent should be able to assist you with these items.
  • And even if you don’t provide health insurance to your employees, you still have a written notice you need to provide to your employees to advise them about the health insurance exchanges. This notice needs to be provided to all current employees by October 1, 2013, and then for any new hires after that, you need to provide the notice within 14 days of hiring. You can find a template for this notice here:
  • If you provide a healthcare FSA (flexible spending account) or an HRA (health reimbursement arrangement) to your employees, has your plan been amended to comply with ACA changes, such as the $2,500 annual FSA limit and no reimbursements for over-the-counter drugs without a prescription? Your employee benefits consultant (which could be Willis & Jurasek) can help you with plan amendments. Also, if you are contributing to your employees’ medical costs through an FSA or HRA, are you paying your per person PCORI fee on Form 720? Your insurance provider may have discussed this with you, or Willis & Jurasek can help.
  • While the employer mandate may not be effective until 2015, did you know that whether you are subject to the mandate or not is based on your number of employees in 2014? Are you planning to stay under 50 full-time equivalent employees to avoid the mandate? Do you know how to measure for the 50 full-time equivalent employees threshold? Willis & Jurasek can help you determine whether you will be subject to the mandate and the cost of non-compliance with the mandate. From there, your insurance agent can assist you with finding a health insurance plan that meets the requirements of the mandate.
  • If you are already providing health insurance to your employees, are you getting full benefit of the available tax credit based on premiums paid? Willis & Jurasek can help you understand the eligibility requirements for the tax credit and, if you meet those requirements, calculate the credit for you.
  • Outside of the direct realm of health insurance, but part of the ACA, are the two new taxes on high-income individuals. First, there is the 0.9% Additional Medicare Tax on high-wage earners that went into effect for 2013. Is your payroll system updated to start withholding this tax on any employees with a W-2 over $200,000? Second, there is the 3.8% Net Investment Income Tax on unearned income if your total income exceeds $250,000 (for married filing jointly). This tax also went into effect for 2013, but there are ways to plan to minimize or even eliminate this tax. Willis & Jurasek can help you design these plans, and then you may need to consult with your investment advisor to put components of the plan in place.

As you can see, the Affordable Care Act has many components to it; we’re just hitting the highlights with the above discussion. We encourage you to involve all members of your financial team in the implementation of these provisions in your business. We’ll be glad to assist you with the matters in our areas of expertise, and we can point you in the right direction to talk to your insurance agent, employee benefits consultant, investment advisor or attorney for areas outside of our expertise.