Case Study – Implementation of the Affordable Care Act by Small Employers

Situation:

The government is implementing the Affordable Care Act effective January 1, 2014. Prior to 2014, you as a business owner of any size business (including the self employed) have several requirements that must be accomplished and documented.

Analysis:

1. ACA applies to every US citizen in the country.

2. Employers must provide notification to their employees of coverage options available through the Marketplace by October 1, 2013.

3. Maximum amount an employee may elect to contribute to health care flexible spending arrangements (FSAs) for any year will be capped at $2500.

4. 3.8% tax will be assessed on net investment income such as taxable capital gains, dividends, rents, royalties, and interest.

5. The Transitional Reinsurance Program – HHS estimates that the fees for 2014 will be $5.25 a month (or $63 for the year) for each individual covered under a health care plan.

6. Limit deductibles for health plans in the small group market to $2,000 for individuals and $4,000 for families.

7. Employee’s contribution toward his or her annual premium for individual coverage should not exceed 9.5% in most cases.

Solution:

I have been amazed at the number of employers and individuals that are using the ostrich approach to the ACA implementation. This is closely aligned to the thought process of doing 80 down the interstate and it is not illegal until you get caught. The IRS will be monitoring the implementation and accomplishment of the requirements of ACA and everyone will get caught. Get with your current health care provider and let them educate you on what they believe will be your best course of action for the coming ACA implementation. The better prepared you are the better able you will be.

If you are at a total loss as to what you should be doing contact ASBC for a consultation.

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