Obamacare: Is Your Company Ready?
Tired of hearing about Obamacare? Great, because we've decided to make your life easier and give you a distilled list about what you need to know to effectively represent your company. For purposes of this discussion, we're going to assume that the company you represent has more than 50 employees. If it doesn't, check out the nifty guide we put together for small businesses.
Large Business -- 50 or More Employees
If the company you represent has more than 50 full-time employees, it's considered a "large" business for purposes of Obamacare. As a large business, your company will not be eligible for the SHOP Marketplace. However, the government has created a grey area for companies that are not too big, not too small (they're just right); beginning in 2016 companies with up to 100 full-time employees can take part in the SHOP Marketplace, a program that simplifies the purchase of health insurance.
One upcoming deadline (October 1, 2013) that your company must comply with is to send the "Obamacare letter" to your company's employees. For more information on the requirements of the letter, and where to download templates, read the article we posted a few weeks ago.
Employer Shared Responsibility Payment
If at least one of your company's employees "qualifies to save money on monthly premiums in the Marketplace" then your company may have to make an Employer Shared Responsibility Payment. One way to avoid this is to make sure that you offer affordable health care to your employees, that is, that the premium does not "exceed 9.5% of their wages for that year as reported on the employee's W-2 form." Whether you offer insurance determines the amount of the payment, which regardless is not tax deductible. For more information, visit the IRS website.
To keep track of the Employer Shared Responsibility Payments, companies will need to report on the health coverage they offer employees. Employers will also need to report "the aggregate cost of employer-provided coverage for each employee on the Form W-2," according to the U.S. Small Business Administration ("SBA").
Other Provisions Applicable to Large Businesses
The SBA also details other provisions that are applicable to large businesses including:
Incentives to create workplace wellness programs;
Limiting the waiting period for health insurance to a maximum of 90 days;
Fees for the Transitional Reinsurance Program (fees are tax deductible);
Medicare withholding and assessments on investment income;
Capping flexible spending account contributions; and
Allocating medical loss ratio rebates.
For more information on what to prepare for, read the detailed list of provisions that effect large businesses provided by the SBA. It may seem overwhelming now, but once you get accustomed to the new requirements it will become second nature.
- Key Features of the Affordable Care Act (U.S. Department of Health & Human Services)
- 5 Things Corporate Counsel Need to Know About Obamacare (FindLaw's In House Blog)
- Why, What and How: Employee Wellness Programs For Your Company (FindLaw's In House Blog)
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.