Affordable Care Act :: Wamhoff Financial & Accounting


Affordable Care Act

  • Individual penalty for not having minimum essential health insurance coverage for 2015 is the greater of $325/adult + $162.50/child up to a max of $975/family or 2% of household income.
  • Small Employer Health Insurance Tax Credit – Eligible small employers could receive a tax credit for providing health insurance coverage to employees & paying for at least 50% of it.
    • The Health Insurance must have been purchased through the Health Insurance Marketplace (“SHOP”) to qualify for the credit.
    • Eligible Small Employer – Less than 25 Full-Time Equivalent Employees & have average annual wages of less than $50,000 per FTE Employees.
    • Full credit amount in 2015 is 50% of Employer’s contributions.
    • To be eligible for the full credit amount you must have 10 or fewer FTE employee’s & have average annual wages of 25,800 or less – any more than that and a reduction in the credit is calculated.
  • Large Employers must provide affordable health care coverage that provides minimum essential coverage beginning in 2015.
    • Minimum essential coverage covers at least 60% of covered health care expenses.
    • Coverage is considered affordable if the cost does not exceed 9.5% of household income.
    • The penalty for not offering minimum essential healthcare coverage is $2,000 per full-time employee – the first 30 full-time employees (80 for employers over 100 FTE) are not subject to the penalty. There is only a penalty if at least one employee receives a premium tax credit on the marketplace.
    • Penalty for not offering affordable health care coverage is $3,000 per employee who receives a premium tax credit – not to exceed penalty calculated above.
      Generally, transition relief is available for employers with 50-99 FTE’s for 2015.
      • Therefore, no penalty would be charged for 2015.
      • An employer qualifies as long as they did not reduce their workforce from Feb 9th to Dec 31st 2014 in order to qualify for transition relief. They also couldn’t have canceled or severely reduced the health coverage they offered as of Feb 9th 2014.
  • Also beginning in 2015, Large Employers must file for all Full-Time Employees forms 1095-C & 1094-C.
    • Form 1095-C must be given to employees on or before January 31st 2016.
    • Both Forms must be filed with the IRS by February 28th 2016 or if filed electronically before March 31st 2016.
    • These forms will report which months coverage was offered for each employee.
    • If affordable minimum essential coverage was not offered to the Employee, Spouse, and Dependents you must include the employee’s share of the lowest cost monthly premium for self only minimum essential coverage.
      • It must be reported for each month if the premium changed during the year or the employee was not covered the entire year (i.e. new or terminated employees).
      • If you fall into this category, you should consider setting up a spreadsheet to track this beginning January 1st.
  • If you are paying your employee directly for health insurance or if you are paying their individual policy for health insurance you need to make sure you do it the correct way to avoid a $100 per day excise tax ($36,500 per year per employee)
    • To avoid the tax while still meeting the goal of paying for an employee’s health insurance you must increase the employees pay by the amount of the premium (or the portion you are paying) and allow them to pay it on their own.

If you have any questions or concerns regarding this please call our office.