September 25, 2013

Affordable Care Act NOW

Did you “hear the one about” the delay of significant elements of the Affordable Care Act (ACA) employer mandate on July 2, 2013? Many employers breathed a sigh of relief then promptly wrote off and forgot about ACA. Did you? It’s not a joke. Heads up. The law is still in place and intact.

The regulatory bodies have made adjustments to the ACA timelines (see specifics on Health and Human Services website Many people think that the whole implementation has been delayed a year because they think employer mandates are delayed for a year. Not so.

The Individual Mandate

If an individual does not have health coverage starting in 2014, an individual penalty will be incurred. The penalty will take the form of either a flat dollar amount or a percentage, whichever is higher. The flat dollar amount per individual is $95 in 2014, then it increases to $325 in 2015, and $695 in 2016. After 2016, the flat dollar amount is indexed to inflation or  it is a percentage of taxable income an amount equal to a percentage of a household’s income (as defined by the Act) phased in at 1% in 2014, 2% in 2015, and 2.5% in 2016. That is significant. It is not $95 for the rest of their lives which is how MOST individuals have misinterpreted the law. For example, if an individual has a household income of $50,000, this individual would be subject to a percentage penalty of $500. The individual would pay the percentage penalty because this percentage penalty is greater than the flat dollar penalty for 2014 (which is $95).

Employer to Do List

On October 1, every employee is required to be notified by their employers about availability of state exchanges, including all of their insurance options, as of January 1, 2014. On October 1, 2013, all 50 states will have exchanges open for business. Nevada Health Link created by the State of Nevada to help individuals and small businesses easily shop for, compare and buy health insurance.

The details of the law and the implications far exceed the normal space that we have for the article. Prior to 2010, a lot of employers offered health insurance and there was no ACA.  As HR experts, we remind people on a daily basis not to be caught up with being angry with the law and automatically assume penalties are “cheaper.” Companies offered insurance in 2010 because there was a value in doing so. Consider all options and make informed decisions.

Written by Jim Annis, President/CEO of The Applied Companies, which provide HR solutions for today’s workplace. Celeste Johnson, Tom Miller, and Nissa Jimenez, Applied’s division directors, contributed to this article.

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