Previously we detailed provisions of the Affordable Care Act that came into effect for 2014 for individuals, families, and small businesses. We’d now like to detail provisions of the Affordable Care Act that will come into effect for 2015 and 2016 for “large” businesses.
Starting in January 2015, “applicable large employers” (ALE) must report their health insurance coverage of their employees to the IRS. An ALE is an employer that employs on average at least 50 full-time equivalent employees during the previous calendar year. A full-time employee is someone who works on average at least 30 hours a week. This is why you have probably heard in the media that some large employers are either cutting back hours to many of their employees and/or cutting out health insurance for part-time employees. Each ALE reports the health insurance coverage by January 31st of the following year on IRS Forms 1094-C and 1095-C to each of their full-time employees, whether or not that employee is offered health care coverage by their employer for that year.
For 2015, businesses with 100 or more full-time equivalent employees must provide health benefits to at least 70% of their full-time employees (and 95% by 2016) or else pay a $2,000 penalty per employee, excluding the first 30 employees. Those employers who have between 50 and 100 full-time equivalent employees must comply with the new IRS rules for 2015, but will not be assessed any penalties until 2016.
If you qualify as an applicable large employer, we can help you navigate through these confusing new tax regulations. Please contact Andrew Ross, CPA at Bedard, Kurowicki & Co., CPA’s at (908)782-7900 or email firstname.lastname@example.org.