Health care reform continues to maintain its leading status on hot-button issues weighing on the minds of business owners. As we move into 2013, there seem to be more questions than answers for employers faced with this confusing legislation. As new guidelines attempting to clarify the law become available, more questions arise.
Below are answers to six common questions about health care reform.
Q1: What information is required to be included on an employee’s W2?
A: The Affordable Care Act (ACA) requires employers to report on the W2 the value of health plan coverage for each employee. This includes the employer and employee share of the cost of health coverage, but excludes dental and vision coverage in separate policies. Reportable amounts also exclude contribution to Health Savings Accounts (HSAs) and employee contributions to Health Flexible Accounts (Health FSAs).
Q2: If a company has fewer than 50 employees, is there a penalty for not providing insurance?
A: There are no penalties for employers with fewer than 50 full-time equivalent employees.
Q3: Regarding the Cadillac tax: If a company has a group of high-risk policyholders, does that mean they have “Cadillac plans” even if they offer “bronze” coverage?
A: Yes, under current guidelines the Cadillac tax is based on the value of the health plan and does not adjust that value for older or higher risk groups.
Q4: How will the Health Reform affect staffing companies?
A: Staffing companies will be treated as the employer and will be subject to the requirements of the PPACA. Temporary employees of the staffing company will be treated as employees of the staffing company. If the staffing company has more than 50 full-time equivalent employees, they will be subject to the mandate and sanctions of the larger employer.
Q5: If a company’s health benefit period is from December 1 to November 30, is it correct to assume that compliance would not be required until December 1, 2014?
A: Yes. Under guidelines issued on January 2, 2013, most employers that offer benefit plans and have an anniversary plan other than January 1 will be required to comply with the PPACA provision on the anniversary of your employment. plan after January 1, 2014. If an employer only offers benefits to a small number of employees, a complaint may be required to be filed by January 1, 2013. Federal Register Vol 78 and No 1 provide additional details.
Q6: If they only offer an HSA and the employer is not making any contributions, will the employer have to pay a penalty since they are not contributing to the insurance?
A: An employer-sponsored high-deductible health plan with a health savings account will have to meet the “affordable” test. That would require an actuarial value of 60% and an employee premium of no more than 9.5% of earnings to avoid the $3,000 penalty. This applies if an employee purchases coverage on the exchange and is eligible for a premium subsidy.
These are just some common questions about the Affordable Care Act. If you need additional information regarding any questions about the 2013 health care reform, please do not hesitate to contact us.