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FOR IMMEDIATE RELEASE:

Contact: Amanda Edwards
I & E Insurance Agency

www.getinsurancequotetoday.com

732-899-8177      
email ---ineagency@gmail.com

 

Obama care will hit Small Business with Serious

Penalties for non-compliance.

 

(August 27, 2015)  Obama care rules for health insurance for 2015 and 2016 have many US taxpayers and Small Business owners confused about their situation and many looking for loop holes. Not only is the desires to minimize costs important, but many are looking for methods to avoid penalties and all the added cost for offering the new plan. Extra fees and costs are hurting all businesses bottom lines and increase costs and wages are discouraging employers from hiring additional workers. Antidotal evidence of this is learned first hand from this writer’s interaction with dozens of employers all over NJ. For example a recent meeting with a local business ocean County Employer, who has 35 + full time employees and twice as many part time, illustrates the steps many are seek to avoid the burden of additional costs and paperwork for compliance in this latest bureaucratic quagmire. After Our meeting with this business man, he is seriously considering putting more than 25% of his full time staff on part time basis and cutting hours back closing operations on Sunday and even the prospects of selling the business. His comments invoking selling the headaches to someone else and walking the beaches as a citizen of the Dominican Republic but that’s another story….

 The Obama Care Employer Mandate / Employer Penalty, originally set to begin in 2014, was delayed until 2015 / 2016. Obama Care’s “employer mandate” is a requirement that all businesses with 50 or more full-time equivalent employees (FTE) provide health insurance to at least 95% of their full-time employees and dependents up to age 26, or pay a fee by 2016. The employer mandate is officially part of the Employer Shared Responsibility Provision. Known as the Affordable Care Act, or Obama care. Under this program, the federal government, state governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of Health Insurance Coverage in the United States.

That was the plan when the bill- that no one ever read till it was passed--- states. You should know, that as an employer, YOU will owe a fine to Uncle Sam if  you do not offer workers insurance, Fines are a flat $2,000 per full-time employee (excluding first 30 employees). If only a few end up with un-affordable coverage or if that coverage doesn’t meet minimum value standards, it’s $3,000 per full-time employee who got cost assistance (but, never more than $2,000 per full-time employee). The fee is always per-month, so it’s always 1/12 of those annual totals for each month.

 

If an employer doesn’t provide coverage, provides coverage that doesn’t offer minimum value, or provides coverage that is unaffordable, then they must make a per-employee, per-month “Employer Shared Responsibility Payment“. The IRS will provide the employer with a notice about the payment. Employers will not be required to include the Employer Shared Responsibility payment on any tax return that they file.

Points of attention--

 

The employer mandate and fine is calculated on  all employees, not just full-time employees.  If your firm has a lot of part time employees, they are also used in the calculation for the fines. 

And the fine, or the fee is based on whether you offer Affordable Health Insurance to your employees that provides minimum value (explained below).

Employers have to offer coverage to “substantially all” (95%) of their full-time employees. Coverage must be offered to dependents up to age 26.
Once a dependent turns 26, coverage no longer needs to be offered.

 Spouses do not count as dependents; coverage does not have to be offered to spouses.

Employers must offer coverage, but employees don’t have to take it. That being said, they can’t get marketplace subsidies if coverage meets affordability and minimum-value guidelines. Since the employee was offered qualifying coverage, the employer doesn’t owe the fee. Employees who work at least 30 hours per week or whose service hours equal at least 130 hours a month for more than 120 days in a year are considered full-time. Employers use measurement periods and look-back periods of 3 – 12 months to find out if they have to comply with the mandate or if an employee is full-time.

Coverage offered to employees must be considered affordable (can’t cost more than9.56% of employee household income) and must provide minimum value (must have an average cost sharing of 60%). If coverage isn’t affordable employees can use the Marketplace and the employer can be fined.

If an employee is not offered coverage under the law then they can get cost assistance on the marketplace based on income. Full-time employees may need to have an employer fill out an employer coverage tool if they aren’t offered affordable coverage.

For employers who don’t provide coverage, the fee is $2,000 per full-time employee (minus first 30 full-time employees). For employers who do provide coverage but don’t provide coverage meeting minimum-value and affordability requirements, the fee is the lesser of: $3,000 per full-time employee receiving subsidies, or $2,000 per full-time employee (minus the first 30). For plan years beginning in 2016 and beyond, employers can exclude 30 full-time employees from the penalty calculation.

In general, the fee is only “triggered” if at least one employee shops on the marketplace, and is eligible for a federal premium subsidy.

The fee does not apply if a dependent shops on the marketplace and receives a subsidy. Rules only apply to employee-only coverage. Employers with over 200 FTE must auto-enroll full-time new-hires and provide an opt-out. A part of the law that required employers to pay a fee for enacting a health insurance waiting period was removed before it took effect. As long as an employer has a waiting period of 90 days or less they are abiding by the law and don’t have to pay a fee. The old rule worked like this: Employers with over 50 full-time equivalent employees will pay $400 for any full-time employee in a 30-60 day waiting period and $600 for any full-time employee in a 60-90 day waiting period. Employers must offer at least a 30 day Special Enrollment Period for employees or qualifying employee family members losing coverage from another source. This means an employee must be given 30 days to enroll in an employer plan after losing non-employer minimum essential coverage for any reasons other than non-payment.  The fee is a per-month fee. So it’s always 1/12 of the total fee for full-time workers for each month.  To clarify, Full-time Equivalent Employee’s (FTE) is used to determine if an employer must comply with the mandate. However, fees are based on full-time workers and not FTE.  FTE is calculated by averaging part-time and full-time hours worked (see below for more details).  A proposed fix to the mandate, called the Save American Workers Act, would increase the part-time requirement to 40 hours a week.

 

For individuals

If you can afford health insurance but choose not to buy it, you must have a health coverage exemption or pay a fee. (The fee is sometimes called the "penalty," "fine," "individual responsibility payment," or "individual mandate.")

If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:

2% of your yearly household income.  (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a Bronze plan.

$325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975. The Open Enrollment Period for 2015 coverage is over.

Open Enrollment for 2016 coverage starts November 1, 2015. Until then, you can still get 2015 coverage: If you qualify for a Special Enrollment Period due to a life change like marriage, having a baby, or losing other coverage Through Medicaid and the Children’s Health Insurance Program, which provide coverage to families and individuals with limited income or other reasons.  Gather everything you need (PDF) before you call or log in. See prices before you apply.

 The fines and fees for non-compliance are very confusing and we suggest you contact not only your Insurance, Tax adviser, or government benefit specialists, but also representatives of the IRS and seek more info on US government web sites such as  www.healthcare.gov   or http://obamacarefacts.com

 

 

 

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