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National Restaurant Association - 7 things you need to know about the ACA

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7 things you need to know about the ACA

The Affordable Care Act’s employer mandate is here. Are you ready? Here are seven things you need to know:

  1. The employer mandate is now in effect. Many employers now face potential penalties if they don’t offer health plans to “substantially all” full-time employees and their dependents. Penalties are phased in: Employers with 100 or more full-time-equivalent employees face penalties starting this year. Employers with 50 to 99 FTE employees generally won’t face penalties until 2016. In 2015, making offers to “substantially all” full-time employees means an employer offers coverage to at least 70 percent of full-time employees. In 2016, “substantially all” means an employer offers coverage to at least 95 percent of full-time employees.
     
  2. Watch the “common control” standard: Employers with more than one business entity may need to consider all their employees as one group in determining if they meet the 100- or 50-FTE employee thresholds. Consult your tax adviser about whether the IRS “common control” standard applies. This governs whether business entities are considered as one or separate groups under the ACA.
     
  3. Make sure you understand who is full time: To avoid penalties, large employers must offer health care coverage to full-time employees and their dependents. The ACA defines full-time as a person with at least 130 hours of service in any given month, or averaging 30 hours of service a week. Treasury Department regulations offer extensive details about how to measure whether employees are considered part-time or full-time, particularly new employees, seasonal employees and employees whose hours vary from month to month.
     
  4. There’s lots of paperwork ahead: Employers with 50 or more full-time-equivalent employees will be required to file extensive information returns with the IRS and statements with employees starting in early 2016, based on data tracked in 2015. The IRS hasn’t yet finalized the forms or instructions but that doesn’t relieve employers of the obligation to track and report the data.
     
  5. Get ready to interact with government-run exchanges: Large businesses face two types of penalties under the ACA’s employer mandate – one if they fail to offer coverage to substantially all their full-time employees, the other if the coverage they offer is not affordable or of minimum value. Penalties kick in only when a full-time employee of a large employer gets a federal tax subsidy to buy a health plan through a federal or state marketplace, also known as an “exchange.” Employers can expect significant interaction with federal and state-run marketplaces as marketplaces begin notifying employers which of their employees received federal tax subsidies to buy plans on an exchange.
     
  6. Even smaller employers need to know about the law: You may not be big enough to be covered by the ACA’s employer mandate, but you need to know about other parts of the law, including a requirement that all employers covered by the federal Fair Labor Standards Act must provide all employees with written notice about the ACA, including how to access the government-run marketplaces.
     
  7. You can advocate for change. As Congress gets down to business for 2015, the NRA is working hard to get lawmakers to make changes to eliminate the law’s harshest effects on employers. Among the changes the NRA supports: bring the law’s full-time definition in line with typical workplace standards, streamline the employer-reporting rules, eliminate the ACA’s auto-enrollment mandate, define “seasonal employment” consistently across the ACA, and simplify the calculation to determine who’s a large vs. small employer.

Compliance with the ACA will be challenging. The National Restaurant Association's Health Care HQ offers solutions to help you navigate the law's requirements.

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