The Affordable Care Act

As the Affordable Care Act continues to constantly change, many businesses are unsure how to interpret and comply with this complex law. We are knowledgeable in all state and federal laws concerning employee benefits, and we pay close attention to news rules and regulations as they are established.
Accordingly, we will help you with the following ACA compliance:

  • Design benefits to meet the requirements of the ACA and other state and federal laws
  • Handle all employee forms and notices
  • Handle ACA reporting
  • Provide training and education on the ACA, and more!

Highlights of the ACA

Following are brief highlights of the ACA provided for your convenience. Because of the complex nature of the ACA, we suggest you call our office for professional assistance.

Both business and individuals may be eligible for tax credits under the ACA.  Thus, the credits are applied as a discount on your monthly insurance premium. Accordingly, to see if you are eligible for a tax credit, please use the Subsidy Calculator provided by the Health Insurance Marketplace.  Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace.

  • Both businesses and individuals must purchase benefits through the Health Insurance Marketplace to secure a tax credit.
  • Individuals must purchase insurance during annual open enrollment – Nov 1st thru December 15th each year.

Following are rules and guidelines of the ACA that insurance companies most follow when issuing health insurance.  Since there have been hundreds of amendments to the Affordable Care Act, so we strongly suggest you call our office for further guidance.

  • There is no longer a pre-existing condition clause.  In other words, insurance companies can not increase rates or deny coverage because of a pre-existing condition.
  • Your dependents can remain on you policy until they turn 26 years old
  • Insurance companies can not consider gender when setting rates.
  • Employer renewals based on the same rates as new business.
  • The waiting period for employer benefits should not exceed 90 days.

You may be subject to a tax penalty if you do not comply with the ACA.  Thus, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits.

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and Substance Abuse disorder services
  • Rehabilitative and habilitative services and devices
  • Pediatric services, including oral and vision care
  • Preventive and wellness services, and chronic disease management

Employers who have more than 50 full-time equivalent employees must offer those employees benefits that pays for 60% of the minimum essential benefits.

  • Applies when at least one employee receives a premium tax credit in the Health Insurance Marketplace
  • The penalty is $2,140 per year multiplied by the number of full-time employees, and excludes the first 30 employees.

Individuals who fail to obtain qualifying health insurance may be subject to a tax penalty.  (Mandate was repealed in November of 2017 – for 2019 coverage).

  • Individuals can have coverage through their employer, or through an individual policy to satisfy the requirement.
  • The tax penalty will be $695 for adults. The penalty is $347.50 for each child.  The maximum family penalty is the greater of 2.5% of income, or three times the adult penalty, which is $2,085.
  • The penalty will be applied on your annual tax return.

Disclaimer:  The material and information on this website has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.  For your convenience we have provided links to third party websites you may find useful.  Note we are not affiliated with these websites nor do we guaranty the availability or accuracy of the information contained in the linked sites.