As a business owner, there are some changes to the Affordable Care Act (ACA) that are in effect at the start of this year. Your company needs to be aware of these changes so your HR department can take the necessary steps. Many business owners are already complaining that the financial impact of some changes will be overwhelming. Others feel that the entire financial impact is yet to be realized. They feel that the liabilities will be manageable in 2016, at least for the time being.
What’s on the horizon for 2016?
From the first of January, 2016, the definition of small employer is no longer a business with one-to-fifty full-time employees. The upper threshold has been increased to one hundred employees. What this means is that companies having anywhere from 50-to-100 employees that were previously not classified as a small business or small employer will now have to meet the ACA requirements meant for small employers.
This is made more complicated when you consider the fact that despite being a small employer as per ACA definition, companies having 50-to-100 full-time (or the equivalent in part time) employees will still be considered a large group employer according to the Employer Mandate and thus the penalties will be calculated accordingly.
What the new ACA rules mean
Additionally, companies having more than a 100 full-time employees had till now been obligated to pay 70 percent of full-time workers’ healthcare coverage. Now, companies with 50 or more fulltime employees will have to offer 95 percent of full-time employees insurance. Else, penalties will be levied. Also, till now 80 full-time employees were excluded while counting the penalty.
The Small Business Health Options Program was only available to businesses with less than 50 full-time employees. Now, it is also available to companies having 50-100 fulltime employees. The total or maximum out of pocket expense for any employee with individual coverage that employers can get employees to pay before they pay for the healthcare coverage is $6,850. The same for family coverage was $13,700. Hereon, $6,850 would apply to family coverage as well, excluding grandfathered plans.
The IRS penalty caps for large companies that don’t meet the reporting requirements are poised to go up as well. In the near future, we will update you on more ACA changes you should be aware of.
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