It is difficult to determine the ACA's effect on a business's bottom line with surety. Afterall, Congress continues to use it as a bargaining chip and the regulations are still being written. However, business owners and equity and debt providers can't sit on the sidelines waiting for resolution.
We are helping our clients make business decisions by providing financial analyses based on the known facts. Some of the ACA's key features affecting business owners beginning in 2015 are:
- 50/30 or $2,000: Companies with at least 50 FTEs (working at least 30 hours/week) must provide affordable health insurance for their FTEs. The annual penalty for failing to offer health insurance is $2,000 per FTE (non-tax deductible; excluding first 30 FTEs).
- 9.5% max/60% min or $3,000: To be considered "affordable," the maximum amount of an employee's premium costs under the employer's plan is 9.5% of annual household income, and the minimum coverage is 60% of medical costs. The annual penalty for failing to offer affordable health insurance is $3,000 per FTE who qualifies for savings in the healthcare marketplace (non-tax deductible; excluding first 30 FTEs).
- Under 25 rule: Companies with fewer than 25 FTEs that provide health insurance may receive a tax credit.
If you are interested in understanding the ACA's potential financial repercussions on a target acquisition or portfolio company, please give us a call at 310.789.1777.
About Brandlin & Associates
Brandlin & Associates is an exclusive provider of accounting due diligence, financial consulting and strategic consulting services. We pride ourselves on offering superior technical expertise, years of practical experience and unparalleled service to decipher financial and operational performance metrics. As a result, our clients are able to make informed decisions in a timely manner.