Recent surveys show many employers are still concerned about non-compliance with the Affordable Care Act. Small employers must worry about essential benefits and eligibility requirements, while larger employers (50+) must worry about these requirements along with pay or play rules, and much more.
As employee benefit brokers, Way Financial understands employer obligations under the ACA and is dedicated to helping our clients navigate the uncertainty of this complex law, as well as other state and federal laws affecting you, your clients, and your employees.
SAVE ON YOUR PREMIUMS
Individuals and Small Businesses may be eligible for a tax credit under ACA healthcare reform laws. The credit is applied as a discount on your monthly insurance premium. To see if you are eligible for a tax credit, use the Subsidy Calculator provided by the Health Insurance Marketplace. Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace. In any case, both businesses and individuals must purchase benefits through the Health Insurance Marketplace to secure their tax credit.
AVOID TAX PENALTIES
EMPLOYERS: Employers who have more than 50 full-time equivalent employees must offer 95% of their workforce benefits that pay for 60% of the minimum essential coverage. If you are in non-compliance, a penalty is assessed monthly and is equal to the number of FTE employees (minus the first 30) multiplied by one-twelfth of $2,000. You may also incur a penalty when at least one of your employees receives a premium tax credit in the Exchange. The payment is assessed monthly and is the lesser of: one-twelfth of $3,000 per FTE employee receiving federal subsidies through the exchange, or one-twelfth of $2,000 per full-time employee (minus the first 30).
INDIVIDUALS: Following is information on the Individual Mandate of the ACA. The penalty for 2020 under Covered California law affects individuals who failed to obtain qualifying health insurance. Individuals could have coverage through their employer, or through an individual policy to satisfy the requirement. If an individual did not have qualifying health insurance, the tax penalty will be $695 for adults. Additionally, the penalty is $347.50 for each child, or 2.5% of gross income above the filing threshold, whichever is higher. Consequently, your penalty will be applied on your annual tax return.
UNDERWRITING GUIDELINES OF THE ACA
-There is no longer a pre-existing condition clause. In other words, insurance companies can not increase rates or deny coverage because of a pre-existing condition.
-Your dependents can remain on you policy until they turn 26 years old.
-Insurance companies can not consider gender when setting rates.
-Employer renewals must be based on the same rates as new business.
-The waiting period for employer benefits should not exceed 90 days.
Your employer paid benefits must comply with the “Essential Benefits” of ACA. Specifically, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits. If you purchase an individual policy from the marketplace, it’s likely that your policy will also contain these benefits.
-Ambulatory patient services
-Maternity and newborn care
-Mental health and Substance ---Abuse disorder services
-Rehabilitative and habilitative services and devices
-Pediatric services, including oral and vision care
-Preventive and wellness services, and chronic disease management