Insurance coverage has been a hot topic this year with the new president in office. There has been a lot of discussions related to the potential changes to the Affordable Care Act (ACA). Even though efforts have been made to change the law, many of the ACA mandates are still in place. Time will tell whether upcoming laws will alter requirements for business owners and employee coverage. The GOP tried to pass a new health care law earlier this year, but the efforts were unsuccessful.
What do you need to know if you own a business? Here is a quick overview of current ACA regulations. Keep in mind that the rules vary depending on the size of your company. So, the best thing that you can do is schedule a consultation with a professional who understands the law. This personalized guidance will ensure that you are following the regulations.
Employer ACA Mandate
The mandates for employers vary depending on the size of the company, and it is determined by the number of people who are employed. If you have 50 or more full-time employees, then you are considered a “large employer” and need to meet all of the requirements. The number of employees is calculated each year to determine if the company is considered a large employer for the following year.
The employer shared responsibility provision of ACA means that large employers need to provide health coverage with minimum value and affordability to full-time employees. This coverage should also be available to the dependents of those employees. The law is extensive and includes rules and exceptions for situations where an employer can make a shared responsibility payment to the IRS if an employee has coverage through the Health Insurance Marketplace.
If you have less than 50 full-time employees, then you aren’t subject to the employer shared responsibility provision. There are tax credits available for companies that provide health care coverage. For example, a company with fewer than 25 full-time employees with less than $50,000 average annual wage can purchase coverage through SHOP (Small Business Health Options Program). This option can qualify the company to receive tax credits for the expense of healthcare coverage.
Health Coverage Reporting
In addition to providing health coverage for employees, you also need to file reporting forms. These forms should be distributed to all employees. Additionally, the forms need to be filed with the IRS to record the information. These forms apply to large employers with 50 or more full-time equivalent employees on average during the year. All businesses that provide self-insured health coverage (regardless of the size of the company) need to file an annual return to report the information for the individuals who were covered.
Most of the forms for this year were released with minimal changes compared to last year. Check the IRS website to download the forms that apply to your business, such as: