The Affordable Care Act – Offer sufficient coverage or pay the penalty
Are you a “large” employer? Your time is running out to get prepared for the Affordable Care Act’s shared responsibility provision. Also called the “play-or-pay” provision that is scheduled to go into effect in 2015. Under transitional relief the IRS issued earlier this year, for 2015, large employers generally include those with at least 100 full-time employees or the equivalent, as defined by the Affordable Care Act. However, the threshold is scheduled to drop to 50 beginning in 2016, and that threshold will apply beginning in 2015 for the Affordable Care Act’s information-reporting provision.
The play-or-pay provision imposes a penalty on large employers if just one full-time employee receives a premium tax credit. The credit is available to employees who enroll in a qualified health plan through a government-run Health Insurance Marketplace and meet certain income requirements, but only if:
- They don’t have access to “minimum essential coverage” from their employer, or
- the employer coverage offered is “unaffordable” or doesn’t provide “minimum value.”
The IRS has issued detailed guidance on what these terms mean and how employers can determine whether they’re a large employer and, if so, whether they’re offering sufficient coverage to avoid the risk of penalties. If you are not sure if you fall into these categories, contact Ciuni & Panichi, Inc. and we can help you determine what will work for you and your company.
If your business could be subject to the play-or-pay provision of the Affordable Care Act and you haven’t yet started preparing, do so now. For more information on play-or-pay, or on the information reporting requirements, please contact Jim Komos at 216.831.7171 or jkomos@cp-advisors.com.
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