What Every Tax and Accounting Practitioner Needs to Know About Health Care Reform in 2015
With the Supreme Court ruling in favor of the government in King v. Burwell, it is clear that Obamacare is here to stay. For tax practitioners, the question is not “Will the ACA be repealed by congress or unraveled by the courts?” but rather “What do we need to know now about health care reform?” This article explores key issues professionals need to be aware of for 2015 and 2016.
Large Employer Mandate
The large employer mandate takes effect in 2015. Employers with 100 or more (50 or more in 2016) full-time equivalent (FTE) employees are subject to the nondeductible mandate penalties.
Employers measure their status as a large employer in the previous year. If an employer is determined to have 50 or more FTEs in 2015, they must play along and provide insurance or pay a fine in 2016.
Employees who are expected to be full-time workers (30 hours or more per week) must be offered insurance within 90 days of hire.
However, the employer does not need to immediately offer insurance if it is not certain whether the employee will work full or part time. For these workers, the employer can use measurement periods ranging from 3 – 12 months in determining whether an employee is full or part time. These measurement periods need to be consistent within certain groups of workers but can change year to year. By careful planning and selection of measurement periods, employers may be able to exclude workers from coverage if they so choose. Read more at CPA Practice Advisor.