Brief Insights | Meeting Provider Relief Fund Reporting Requireme...
VIEWpoint Issue 2 | 2021
2021-2022 Tax Planning Guide
Understanding Partnership Administrative Adjustment Requests
Proposed Regulations for Inherited IRAs Bring Unwelcome Surprises
CFPB’s Approach to Regulations
While the majority of the Patient Protection and Affordable Care Act going into effect on Jan. 1, 2014, employers are still in need of the federal government’s final guidance on many pieces of the legislation. How prepared you are today and looking forward to 2014 likely depends upon how much you were relying on the outcome of the November 2012 presidential election. Businesses that took the “wait-and-see” approach may now have some catching up to bring themselves up to speed on the understanding and implementation of the health care reform requirements. Employers who held the course will need to continue to stay mindful of the ongoing updates to the regulations as they are finalized and published.
Certain health care revisions may be more applicable to your business than others. For example, the Small Business Health Care Tax Credit gives a tax credit to eligible small businesses that provide health care coverage to their employees. For the years ending 2010 through 2013, small business can receive a maximum tax credit of 35 percent. Small tax-exempt employers such as charities can received a tax credit of up to 25 percent. These rates will increase on Jan. 1, 2014 to 50 percent and 35 percent, respectively.
Certain employers may also be subject to a penalty tax if they either fail to offer health coverage or offer coverage that does not satisfy certain standards:
This penalty is capped at the amount the employer would have otherwise had to pay if the employer were not offering coverage. The penalty tax is not deductible.
Pending final guidance, by Mar. 1, 2013, plans must notify employees and new hires of the upcoming existence of state insurance exchanges.
Some states have fallen in line with the Patient Protection and Affordable Care Act, while other states have been more reluctant to the health care revisions and even opted out of some of critical portions of the act.
Michigan: Michigan opted not to have a state-based health exchange, but will link up with a federal health exchange. While Governor Rick Snyder had supported a state exchange, the complexity of creating it along with the number of unanswered questions was a larger undertaking than the Michigan House of Representatives was willing to commit to. Snyder has filed a grant application to move ahead with the state-federal exchange, but down the road may wish to exercise the option for a state exchange.
Texas: Governor Rick Perry has been vocal about halting the expansion of Medicaid to some of the state’s poorest residents. The state has opted for alternatives besides a state exchange. Legislators passed what is known as a transformation waiver, providing monetary incentives to hospitals that work closely with doctors and clinics to provide effective, more cost-effective health care. Currently, Texas facilitates the Regional Healthcare Partnerships that enable hospitals throughout the state to coordinate health care and ultimately improve access and affordability.
Florida: Governor Rick Scott announced that Florida would not be pursuing efforts to implement a state-based health insurance exchange. Florida’s Agency for Health Care Administration has returned the $1 million federal Exchange Planning grant received in 2010.
It will be essential for employers to understand how health care reform defines full-time, ongoing, variable and seasonal employees. While traditionally a full-time employee has been defined as 40 hours per week, health care reform defines full-time as an average of 30 hours during a specified period of time. In addition, there is guidance on when an employee is eligible to come onto the plan as well as the length of time that they are eligible to remain on the plan regardless of their hours of service once on the plan.
In August 2012, the IRS issued notices that were intended to aid employers in determining which of their employees they should be concerned with for purposes of the employer mandate. While one might have hoped that this would have been a fairly simple calculation, it has created great cause for concern for employers.
Proposed rules published in the Federal Registry as recently as Jan. 2, 2013, attempt to further clarify the requirements put forward by the Internal Revenue Code section 498H. It addresses “pay-or-play” penalties identified for controlled groups and further defines dependents while continuing to identify self-only coverage as the basis for affordable coverage.
While many factors remain yet unknown, employers are strongly encouraged to continue working with their insurance advisors to identify what their possible penalties may be if they either do not provide coverage to full-time employees; provide coverage that is unaffordable to some or all employees or provide coverage that is not of minimum value.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
A quick registration is required to view our resources.
You will only be asked to do this one time (unless you don't save your browser cookies).