Health Insurance Industry Changes And What You Need To Know
Large Employer Mandate Delayed Until 2015: The Treasury Department has announced that the 2014 mandate for employers with 50 or more full-time workers has been delayed until 2015. This means that “large” employers will not be subject to federal penalties for not providing qualified health insurance in 2014. This does not change the part of PPACA requiring all individuals to have a health plan as of January 1, 2014. The Affordable Care Act requires that all employers with more than 50 full-time workers provide health insurance or face potential penalties. This delays enforcement of the Employer Mandate until 2015.
As with many aspects of the Affordable Care Act, deadlines were approaching with the Administration still unable to provide details as to how new requirements would be implemented, reported, and/or enforced. From the Treasury Department: “This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”
Small Employer Tax CREDIT!! Pursuant to the PPACA, small employers – those with fewer than 50 full-time equivalent (FTE) employees are not subject to the Employer Shared Responsibility provision. However, small employers that have 25 or fewer FTEs may be eligible for incentives from the federal government to provide their employees with health coverage. Many of the rules regarding this tax credit apply to the years 2010-2013. Regulations regarding the tax credit’s future starting in 2014 have yet to be released by the Internal Revenue Service (IRS). Small employers who provide health insurance coverage to their employees may not realize they can claim a federal income tax credit on their annual federal tax returns. Unfortunately, a very low percentage of qualified business owners are taking advantage of this credit, according to government reports. An employer with fewer than 25 FTEs that offers insurance coverage may be eligible for a tax credit, but must meet specific IRS guidelines to be eligible.
Specifically, to be eligible for the credit, a business must:
-Have fewer than 25 full time (equivalent) employees: FTE means two employees at 20 hours per week count as one;
- The employer must confirm that they provide at least 50% of the cost of the employee health insurance.
-Lastly, employers must pay their workers an average of less than $50,000 per year to qualify.
This excludes owners in most cases Any employer that satisfies all three of these requirements is eligible for the tax credit; however, the smaller, lower wage employers will receive a larger tax credit than those employers who just barely meet the criteria.
Mandatory Employee Notices:
The Department of Labor's Employee Benefits Security Administration has published guidance pertaining to the notices employers must give to their employees concerning their coverage options under the ACA. Employers are now required to provide notice of the Exchanges to current employees on or by October 1, 2013. New employees who start after October 1, 2013 must be provided notice within 14 days of their start date. As we get closer to the deadline, Rocky Mountain Benefits will provide sample notifications for your use.