(by Slava Darozhkin)
Ever since the ACA was signed into effect, big businesses around the nation have been scrambling to escape penalties accrued unknowingly, and to ensure their business isn’t run into the ground because of healthcare disputes.
What Are The Rules?
The only way to stay ahead of the curve and know when you’re supposed to file what, and as what, is to arm yourself with knowledge.
Which businesses have to comply with the ACA? What parts of the ACA must business comply with? How will the ACA affect my business? Before jumping into these, and other questions, let’s first examine which businesses are even obligated to be worried about the ACA.
What Is an Applicable Large Employer (ALE)?
A key feature of the Affordable Care Act (also known as Obamacare) is the way in which responsibility for affordable health care coverage is shared between stakeholders. Companies that employ 50 or more people may be considered "Applicable Large Employers", or ALEs, under the Affordable Care Act (ACA).
According to the ACA, an employer with 50 or more full-time employees is considered an applicable large employer, and therefore must provide health insurance to their employees that meet the standard, which is determined by the act.
An employee is considered full-time when they work a 30-hour week. Part-time employees’ hours are combined to equal single, full-time employees, and thus the company’s status is determined. Seasonal employees can also be considered part-time if there are more than 50 of them working for the same company at a time, and they work at least 120 days of the calendar year.
Play or Pay
The obligations for the employer are simple: provide adequate health insurance to more than 95% of your full-time employees or pay a penalty.
“Adequate” health insurance is defined by predetermined standards in the Obamacare legislation, achieved through a convoluted cycle of information gathering, to the tune of 9.5% of the employee’s household’s income. Essentially, at least 60% of the total cost of benefits for health care services covered under the plan.
To aid you in figuring out your precise costs, the IRS has been kind enough to provide us with a calculator in the form of a spreadsheet.
Now that you have a clear understanding of what it means to “play” and care for your 50+ full-time employees properly, or “pay” and pay the fees racked up for each employee the company didn’t help, we must circle back and answer the question; does it pay to play?
Ultimately we believe that yes, it does indeed, pay to play. Records prove companies save more money on the cheaper health insurance deals through ACA than paying for the penalties accrued over time.