Large Business

Are you at risk of facing a “Play-or-Pay” tax penalty?  Beginning in 2015, those who do not fulfill the “shared responsibility” provisions in Section 1511 of the Patient Protection and Affordable Care Act (PPACA) will be at risk of facing a tax penalty for being outside of compliance.

This will have a major impact on large employers. Large group employers that offer coverage AND large group employers that do not offer coverage will be subject to this tax.

The question employers are asking is “should we even offer health care coverage to our employees, or just pay the penalty instead?”

How can I help you?

I am truly interested in what is important to you and often meet or talk to families or human resource officers about potential changes or questions about coverage or policy.

Large Group of Business PeopleThe “Play-or-Pay” tax is meant to inspire and encourage employers to offer more to their employees. Employers are taxed if they refuse to participate in the “shared responsibility” provisions. These “shared responsibilities” are going to be enforced, and make understanding them crucial to a large business owner.

There are several considerations that an employer must face when deciding what the best option is for their business. There is a benefit floor for all health plans beginning in 2014.

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The Affordable Care Act (ACA) will require all health plans offered by employers to include (at minimum):

  • Hospitalization
  • Emergency services
  • Maternity and newborn care
  • Ambulatory patient services
  • Mental Health and substance abuse disorder services (including behavioral health treatment)
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Pediatric services (including vision and oral care)
  • Preventive and wellness services and chronic disease management

    To avoid the “Play-or-Pay” Tax penalty, a large group employer must:

Insurance carries a high cost

  • Offer these “essential health benefits” to their full-time employees and their dependents

  • Offer at least one employee coverage under a “qualified health plan” through an Exchange with some form of financial assistance (i.e. premium tax credits, other subsidy)

If an employer is outside of compliance, they will be subject to the “Play-or-Pay” Tax penalty of $166.67 per month, per employee, after an allowable 30 employee reduction. Tax is assessed on a monthly basis for any month in which all the conditions are not met.

Now is the time to evaluate the cost of the tax against the cost it is to offer “minimum essential coverage”. There are two situations where the employer’s “minimum essential coverage” will be considered unaffordable:

  • If an employer’s total allowed costs of benefits is less than 60%, or The premium being charged to the employee is above 9.5% of the employee’s household income.
  • If one of these situations arise, an employee can apply for an “affordability waiver” through the exchange, and the penalty tax on the employer will only apply for employees that receive and “affordability waiver”.

In most cases, employees will not be eligible for a premium tax credit or other subsidy through the exchange if there is an employer-sponsored coverage plan.

For offering employers, the applicable tax penalty will be $250 a month. Similar to employers not offering “minimum essential coverage”, the tax penalty will be assessed on a monthly basis for each employee who receives financial assistance through the Exchange. However, there is no 30-employee reduction, and the total penalty amount is capped at the maximum amount of penalty that would have been paid if the employer did not offer adequate coverage and was subject to the “Play-or-Pay” tax.

Health reform is not complete and there will be alterations to some issues. Our role is to keep you informed with the most up to date information and help keep you and your employees happy, healthy, and productive.

Most owners and managers want to do one or more of the following:

1.  Make more money

2.  Save money

3.  Make their job easier.

I understand and am here to make sure you have more time to earn money, that you don’t spend too much in the process and to make your job a little easier.  I am not only a father and grandfather, but I owned and operated an oil service business for over 20 years before joining changing industries in 2007.

What is most important to you?  Your business?

What are concerns that you are dealing with currently, and in near future?

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How can I help you?

I am truly interested in what is important to you and often meet or talk to families or human resource officers about potential changes or questions about coverage or policy.

When it comes to running a business, or running a family for that matter, having the facts can make all the difference in the world. Whether you are expanding your family or business, trying to optimize your benefits program, or trying to balance cost with value – I am here to answer your questions and provide advice on issues you may not have considered.  As seasoned experts we have most information at our finger tips, but what we don’t have I can get for you.

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