|January 13, 2014|
Previously published on January 6, 2014
Although the Affordable Care Act (“ACA”) (a/k/a: “Obamacare”) was signed into law over 3½ years ago, many employers remain confused about their obligations under the ACA. While the administration has delayed implementation of some of the ACA’s requirements, others will or have taken effect as scheduled. Importantly, employers must be aware of the following provisions:
October 1, 2013: All employers covered by the Fair Labor Standards Act (i.e.: any business with annual sales or business done of at least $500,000, as well as some other businesses) were required to provide their employees with a written notice informing the employees: (1) of the existence of a government health insurance exchange, including a description of the services provided by such exchange; (2) that the employees may be eligible for certain tax credits if they purchase health insurance through the government exchange; (3) that if the employee purchases a health plan through the government exchange, the employee may lose any contribution his/her employer makes toward premium payments for an employer-sponsored health plan; and (4) that all or a portion of the employer’s and the employee’s contribution to an employer-sponsored health plan may be excludable from income for income tax purposes, while payments made for a health plan obtained through a government exchange are not tax-deductable. This notice must be provided to all current employees, and must be provided to future hires within 14 days of their start date.
January 1, 2014: Although the administration has delayed the implementation of the ACA’s employer mandate, which penalizes employers with 50 or more employees who do not provide “affordable” health insurance plans to their employees, the small business tax credit provision of the ACA is still effective January 1, 2014. Thus, employers with between 11 and 25 employees that contribute to a portion of their employees’ health insurance premiums may be eligible for a tax credit. The tax credit ranges from 3% to 50% of the amount of the employer contribution.
January 1, 2014: All employers with 250 or more employees must report the cost of coverage under an employer-sponsored group health plan on each employee’s Form W-2 issued for calendar year 2013 (i.e.: W-2 forms issued to employees in January 2014).