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With the employer mandate quickly approaching in January of 2015, here is a list of suggestions to prepare for the Affordable Care Act (ACA).

  1.  Research your insurance options by discussing with qualified insurance brokers, agents and consultants.
  2. Estimate how many employees are enrolled in Medicaid.
  3. Estimate how many employees will be eligible for the ACA subsidies.
  4. Determine how many employees will qualify for full-time status and how many will not meet that criteria.
  5. Provide relevant information to current employees and new hires.
  6. Discuss additional concerns with a legal counsel, regarding applicable industry concerns, costs and coverage.

After you have done your research and gathered your data, you must decide if you will “Pay or Play”, meaning provide the appropriate insurance or pay the penalties for not doing so.

1. Are You Covered by the Employer “Pay or Play” Mandate?

  • Determine if you will be subject to the 2015 pay or play rules based on your 2014 workforce (100 or more FTEs)? Or can you delay compliance until 2016 as a medium employer (50 or more FTEs)?
  • Make sure you have included all controlled group and affiliated service group members in your determination.
  • If you use staffing company/PEO/leasing, determine if workers are your common law employees.
  • Confirm if any special transition rules delay your compliance deadline (double-check that you satisfy all
  • rules).
  • Decide if you will use a 6 consecutive month transitional measurement period to determine FTEs for 2015.
  •  Identify any steps you need/want to take to avoid coverage by pay or play rules or minimize impact.

 2. Who Will You Cover?

If you will “play” (provide affordable, minimum value coverage):

  • Decide if you will need to use measurement periods to identify full-time employees and, if so, (a) modify payroll systems to track, and (b) make sure plan and insurance policies accurately reflect.
  • Determine if you will apply orientation, waiting period, or minimum hours of service before coverage begins.
  • Make sure your systems properly track breaks-in-service.
  • Decide whether to exclude certain groups through company restructuring, excluding Medicaid-eligible, or enforcing part-time hours limits.
  • If you use staffing company/PEO/leasing, decide who will provide health coverage.

3. Plan Structuring:

If you will “play” (provide affordable, minimum value coverage):

  • Review plan(s) to confirm they satisfy minimum essential coverage rules.
  • Determine what method you will use to calculate whether plan coverage is “affordable” (is the employee only premium less than 9.5% of household income?).
  • Decide what changes you need/want to make to dependent and spousal coverage, based on coverage
  • requirements and affordability requirements.

4. Employer Reporting:

  • If you are subject to the Mandate, make sure you file all required reports and include required information on Forms W-2 with the IRS.

This checklist is intended to provide a list of common steps that plan sponsors should consider in preparing for compliance with health care reform for 2015. This list is not intended to be all-inclusive and assumes all required compliance steps were taken to-date. You should review your own plan’s terms and consult your legal counsel to determine the actual steps needed for your plan.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Sources:  American Staffing Association, ASA for you;  McKenna, Long and Aldridge, 2015 ACA “Pay or Play” Checklist

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