Clarifying the Affordable Care Act
With the Patient Protection and Affordable Care Act ("the Act") taking effect in 2014, employers and individuals need to know what applies to them and how they can determine their obligations in keeping with the Act.
ABC chapters in Michigan have offered several informational meetings to assist members in determining the extent of their liabilities under the new Act. With the assistance of one of the presenters, Jerry Panich of GRA Benefits Group in East Lansing, we are offering an introduction to the Act and its tenets here. With the help of the following charts member companies can audit their company's compliance by answering a few simple questions, see Chart #1.
Before using Chart #1, it is necessary to calculate the Full Time Equivalents of your company. This is NOT necessarily the same as your full time employee count. To assist with that calculation please click here for an example of how to calculate your full-time equivalents.
As noted in example above, there is a penalty for not offering coverage which is a tax equal to the number of full-time equivalent employees (less the 30-employee threshold if the employer qualifies as an applicable large employer).
It is important to note that an employer is not considered to be an applicable large employer if their workforce exceeds 50 full-time employees for not more than 120 days during the calendar year and those excess employees are seasonal workers. In the Act, a full-time employee is defined as someone who is employed on average at least 30 hours per week. View chart #1 to determine if you are an employer who will be assessed penalties for not offering affordable coverage beginning in 2014.
To determine the individual obligation under the Act, click here for chart #2. Only those individuals who respond "no" to both questions would be penalized for not having health insurance. Those penalties are outlined year by year at the bottom of the chart.
This information is intended as a general guideline to assist ABC members and their employees in determining how the new Act applies to them. The information above is not intended to give legal, accounting or health insurance advice and we encourage each ABC member to seek the advice of their accountant, insurance agent or attorney, if needed.
