Starting on Jan 1 of 2014, the majority of the Affordable Care Act requirements will come in to effect, therefore , California businesses and organizations should know about what exactly their obligations will be in order to be in compliance with all the new regulations. Businesses should begin preparing right now for the latest regulations as some parts within the ACA utilize a look back time-frame to determine selected employee/employer responsibilities, therefore the following is a look at what you want to prepare for in 2014.
The most important aspect of the ACA that will concern employers in California is the Employer Mandate that will require certain businesses to offer minimum insurance coverage to their full time employees or face a penalty. What is a full time employee? Those are persons who work an average of at least 30 hours per week. In addition to full time employees, the number of part time employees are also used to calculate the number of full time employees at your business. This is calculated by adding up the number of part time hours worked over a month and dividing by 120.
Now the first thing to make note of is that if you've got less than 50 employees under this calculation, you happen to be exempt from any penalty if you ever make a choice to not provide insurance coverage to your full time workers. The only businesses that would need to pick from supplying coverage or else having to pay a penalty are really businesses having more than 50 full-time employees. This doesn't indicate that you simply shouldn't offer personnel health insurance coverage. Health insurance coverage can be a benefit which will help attract quality individuals to your small business. It basically means if you choose not to, under the Affordable Care Act you simply won't be penalized for doing so.
For all those businesses that do not provide minimal protection for their workforce and currently have over 50 full time workers, and at least one of those office personnel receives any tax credit or cost sharing subsidy via California's healthcare exchange, your organization will be penalized. That penalty is normally calculated at $2,000 per full-time worker after the initial 30 people. So, for example assuming you have fifty fulltime team members, your fee is going to be $40,000 per year.
And finally, if you provide plans to your workforce, and that insurance coverage is considered either unaffordable to them, or perhaps doesn't deliver minimal insurance coverage, you'll also have a penalty that's measured a little bit differently. In those circumstances it is established as the lesser of $2,000 for each fulltime employee or $3,000 for each full-time person receiving a premium tax credit. What are premium tax credits? These would be credits from the government that will help workers with incomes up to four times the federal poverty amount ($88,200 for any family of 4 in 2010).
Using these guidelines should help you decide whether or not to provide minimum coverage with regards to the Affordable Care Act. Whether or not to provide coverage to your employees is a business decision that is based on many factors including employee retention, quality of work force and cost, but hopefully this article has shed light on potential costs of one decision California businesses must deal with before Jan 1 2014.
The most important aspect of the ACA that will concern employers in California is the Employer Mandate that will require certain businesses to offer minimum insurance coverage to their full time employees or face a penalty. What is a full time employee? Those are persons who work an average of at least 30 hours per week. In addition to full time employees, the number of part time employees are also used to calculate the number of full time employees at your business. This is calculated by adding up the number of part time hours worked over a month and dividing by 120.
Now the first thing to make note of is that if you've got less than 50 employees under this calculation, you happen to be exempt from any penalty if you ever make a choice to not provide insurance coverage to your full time workers. The only businesses that would need to pick from supplying coverage or else having to pay a penalty are really businesses having more than 50 full-time employees. This doesn't indicate that you simply shouldn't offer personnel health insurance coverage. Health insurance coverage can be a benefit which will help attract quality individuals to your small business. It basically means if you choose not to, under the Affordable Care Act you simply won't be penalized for doing so.
For all those businesses that do not provide minimal protection for their workforce and currently have over 50 full time workers, and at least one of those office personnel receives any tax credit or cost sharing subsidy via California's healthcare exchange, your organization will be penalized. That penalty is normally calculated at $2,000 per full-time worker after the initial 30 people. So, for example assuming you have fifty fulltime team members, your fee is going to be $40,000 per year.
And finally, if you provide plans to your workforce, and that insurance coverage is considered either unaffordable to them, or perhaps doesn't deliver minimal insurance coverage, you'll also have a penalty that's measured a little bit differently. In those circumstances it is established as the lesser of $2,000 for each fulltime employee or $3,000 for each full-time person receiving a premium tax credit. What are premium tax credits? These would be credits from the government that will help workers with incomes up to four times the federal poverty amount ($88,200 for any family of 4 in 2010).
Using these guidelines should help you decide whether or not to provide minimum coverage with regards to the Affordable Care Act. Whether or not to provide coverage to your employees is a business decision that is based on many factors including employee retention, quality of work force and cost, but hopefully this article has shed light on potential costs of one decision California businesses must deal with before Jan 1 2014.
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