Getting to Know the Affordable Care Act Changes Effective in 2016

One thing that is always constant in business is change. For over 25 years, our clients have put their trust in us to provide accurate direction on any changing regulations. One regulation change that is rapidly approaching is the implementation of the employer mandate of the Affordable Care Act (ACA), which will greatly impact small businesses.

Starting in the 2016 plan year, the ACA stipulates that any employer with 50 or more full-time employees or full-time equivalents (FTE) must provide health insurance coverage to 95% of full-time employees and their dependents up to age 26. A full-time employee is classified as someone who works 30 or more hours per week. Full-time equivalents are calculated by counting all hours worked by part-time employees in a week and dividing that number by 30. If the business has 49 or less full-time employees and FTEs, coverage under ACA regulations does not apply.

Employers are required to offer coverage that provides “minimum value” and must be deemed “affordable.” Coverage provides “minimum value” if it pays at least 60% of the cost of covered services (i.e. deductibles, copays, coinsurance, etc.). Coverage is deemed “affordable” if employee contributions for employee-only coverage does not exceed 9.5% of income. If these two criteria are not met, the employer can incur penalties.

If the employer does not offer any coverage, the penalty is $2,000 per full-time employee if one full-time employee receives a federal subsidy for purchasing marketplace coverage. The employer may subtract the first 30 full-time employees. If coverage is offered, but does not meet the “minimum value” or is not deemed “affordable,” the penalty is the lesser of $3,000 per full-time employee receiving a subsidy OR $2,000 per full-time employee. The employer may subtract the first 30 full-time employees. Penalties are owed on a monthly basis and the above-referenced figures represent the annual cost.

We offer the major medical products you need to help your business be in compliance with new ACA regulations. The law allows fringe dollars to be used to pay for medical premiums and we offer premium medical plans from some of the top providers including Aetna and Blue Cross Blue Shield. Don’t subject your business to unnecessary fines. Utilize your fringe dollars for your benefit! Contact us today and let us help you comply with the new ACA law changes!