Louis Balbirer of Kaufman Rossin writes a guest blog post for NetMinder about changes related to healthcare reform. This is the first post in a two-part series discussing opportunities and challenges of the Affordable Care Act for small and large businesses. Material shared here was presented at the C-Suite Breakfast Series event, co-sponsored by Kaufman Rossin and Vistage.
By January 1, 2015, large businesses will need to decide if they are going to extend coverage to their employees or pay the annual fee for declining to “play.” For businesses, understanding their obligations under the Affordable Care Act (ACA) now and in the coming months is more important than ever.
The ACA was the topic of the most recent C-Suite Breakfast Series. A panel of experts discussed the impact of the Affordable Care Act on small and large business.
- Alexis DeLuca, director, benefits practice at Slaton
- Barbara Jacobowitz, chair of the Health Services Administration at Keiser University
- Jodi Laurence, founding partner of Florida Health Law Center
- Joy Batteen, director of human resources at Kaufman Rossin
What are some opportunities for large businesses?
Companies with more than 50 full-time equivalent employees are considered large businesses under the healthcare law. Large businesses are subject to many rules under the ACA that do not apply to small businesses.
The Affordable Care Act presents several opportunities for large businesses related to the insurance coverage options they provide to their employees.
- The opening of the Small Business Health Options Program (SHOP) marketplace to businesses with 50-100 full-time employees in 2015 will offer employers additional insurance plan options.
- According to the panel discussion, quality of insurance coverage and healthcare is expected to increase for employees at large businesses.
- The delay of the Employer Shared Responsibilities Provisions until January 1, 2015, for businesses with more than 100 full time equivalent employees, allows employers more time to strategically position themselves to provide insurance in order to avoid associated penalties. Qualifying businesses with 50-100 full time equivalent employees have until January 1, 2016, to comply with the provisions.
- Businesses that choose to participate in health insurance plans can use benefits as a recruiting tool to potentially attract higher-quality candidates than those who choose to pay the fees associated with not providing coverage.
What has the Affordable Care Act made more challenging for large businesses?
Large businesses have a greater responsibility than small businesses under the Affordable Care Act. A number of deadline changes have made the roll-out of the healthcare law even more confusing for large employers. Added expenses, additional reporting and mandatory coverage for all full-time employees are further complicating the process for large employers.
The following challenges face large businesses under the healthcare law:
- Reporting responsibilities for large businesses mean added infrastructure is needed. In 2015, large businesses must start reporting on whether insurance was provided to employees, what type of coverage was offered, and some companies may be required to report on the value of the insurance provided to each employee on his or her W-2.
- Guidance and regulations continue to evolve, making it challenging to plan and comply with the law.
- Cost of insurance has increased (in most cases) due to plan design limitations and fees or taxes imposed by the Affordable Care Act.
- Insurance rates may increase for employers if plan participation is low.
- Employees may not be able to keep their current insurance plans due to ACA mandates.
- Large companies that do not offer affordable coverage may be subject to penalties of up to $3,000 per subsidized employee.
What’s ahead for business owners?
Large businesses need to decide if they are going to pay or play by the January 1, 2015, deadline.
“When we talk about next steps, I recommend that companies prepare for the compliance and reporting requirements,” said panelist Alexis DeLuca. “Inevitably, whether a large business chooses to pay or play, they’re likely going to end up with a larger reporting burden than they planned for.”
According to DeLuca, businesses should take steps to ensure they are ready to comply with the changes as they roll out. Investing in the infrastructure needed to accurately report, capturing the required data and planning ahead for annual assessments of health insurance options by contacting an insurance broker or a tax advisor will help large businesses manage the impact of Affordable Care Act.
Louis Balbirer, CPA, is a director of tax services with Kaufman Rossin, one of the top CPA firms in the U.S. He has 20 years of experience providing tax and accounting services to clients and can be reached at email@example.com.