What Employees Should Know About Health Care Reform

The goal of The Affordable Care Act, most often referred to as “Obamacare,” is to provide access to affordable health care coverage to everyone in the United States.  The reason for this is that as of 2014, everyone is required to have some form of health insurance, which can be provided through individual plans, employer-sponsored plans, or government programs.  The repercussion of not having an insurance plan is a monetary penalty.  As of 2015, this penalty is $325 per adult and $162.50 per child, or 2 percent of your household income, whichever is greater, with a family maximum of $975.  Questions on your tax return will help determine if you are required to pay the penalty, are eligible for a government subsidy, or are exempt from coverage. If you are not able to obtain health insurance through your employer, you will need to purchase health insurance individually from an insurance provider.  To assist with this, the government has established an online exchange called the Health Insurance Marketplace.  This marketplace serves to aggregate all of an individual’s health insurance options into one site to simplify the comparison shopping for the purchaser.  While you are not required to use the marketplace, you may be eligible for tax credits or assistance from the government if you use it. The period of time you can sign up for health insurance through any source as known as the Open Enrollment period.  This time can vary from state to state or employer to employer, but is typically in October or November with the idea that the plan you sign up for will begin January 1st...

The Affordable Care Act Employer Mandate

Often referred to as “Obamacare,” the Affordable Care Act contains a mandate that requires all businesses with 50 or more full time equivalent (FTE) employees to provide health insurance to at least 95% of those employees and their dependents up to age 26.  Businesses with 50 to 99 FTE will need to insure those workers by 2016.  Businesses with 100 or more FTE need to insure at least 70% of those workers by 2015, and 95% by 2016.  Failure to do so will result in a per-month, per-employee monetary tax penalty in the thousands of dollars. Under Obamacare, a full time employee is defined as anyone working an average of 30 hours per week or 130 hours per month who works a minimum of 120 days during the year.  Full time equivalent is determined by adding the number of full-time employees to the combined number of part-time employee hours worked and dividing by 30. There are three different ways in which hours can be counted. Actual Hours Worked– This includes the actual hours an employee worked and was paid for, as well as paid leave hours, per payroll records. For example, if an employee worked for 1000 hours and was paid for 40 hours of vacation, their total would be 1,040. Days Worked Equivalency– With this method, you credit an employee with 8 hours for each day they worked for a minimum of 1 hour. Therefore, if an employee came in Monday-Friday and worked only 4 hours each day, you would still credit them for a full 40 hours that week. Weeks Worked Equivalency– Under this method, an employee...