- Are you a Small Employer? Beginning in 2014, employers with 50 or fewer full-time plus full- time equivalent employees will be categorized as a “Small Employer.” If you are part of a “Controlled” or “Affiliated Service” group, you may in fact, be a large employer under the law. Your broker can help you determine your status.
- Do you qualify for a Small Business Tax Credit? Employers with fewer than 25 employees should check to see if they qualify for the Small Business Tax Credit. For tax years beginning in 2014, the credit will be available only to small businesses that purchase health coverage through an Exchange, also called a Health Insurance Marketplace. Ask your broker if you qualify.
- Are your employees aware of new rules for health flexible spending accounts (FSA)? Your employees should be aware that 1) employee salary reduction contributions to health FSAs will be limited to ,500 per plan year, with indexed increases allowed in future years to adjust for inflation. 2) funds from these plans can no longer be used to buy over-the-counter drugs (except insulin) without a prescription. 3) employees will pay higher penalties (20%) for withdrawing HSA funds for nonmedical expenses.
- Are you providing written notice about Exchanges (Health Insurance Marketplaces)? Applicable employers must provide written notice to current employees by Oct. 1, 2013, and new employees within 14 days of their start date to inform them of their coverage options available through the new Exchange (Covered California). The U.S. Department of Labor shared a Model Notice employers may use to meet this requirement that can be found on the Department of Labor website: www.dol.gov/ebsa/pdf/FLSAwithplans.pdf or www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
- Have you provided a Summary of Benefits and Coverage (SBC) and Uniform Glossary? On or after Sept. 23, 2012, group health plans and health insurance issuers offering group or individual health insurance coverage are now required to provide a Uniform Glossary and an SBC that accurately describes the benefits and coverage under the applicable plan or coverage. The final regulations require that the SBC be provided in several instances (upon application, by the first day of coverage if there are any changes, special enrollees, upon renewal, upon request and off-renewal changes) and can be included as part of the SPD. A model SBC can be downloaded from the Department of Labor website at www.dol.gov/ebsa/pdf/SBCtemplate.pdf. The Uniform Glossary Template is located here: http://www.dol.gov/ebsa/pdf/SBCUniformGlossary.pdf
- Do you know the employee eligibility Waiting Period? A “waiting period” is defined as the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. In California, this waiting period is limited to 60 days from date of hire.
- Have you notified your employees if your plan has a “Grandfathered Status”? To maintain status as a grandfathered health plan, a plan or health insurance coverage must include a statement, in any plan materials provided to a participant or beneficiary describing the benefits provided under the plan or health insurance coverage, that the plan or coverage believes it is a grandfathered health plan within the meaning of section 1251 of the Patient Protection and Affordable Care Act and must provide contact information for questions and complaints.
- Does your plan provide Essential Health Benefits? The ACA identifies a range of services that must be included in the benefits package for small group plans. These 10 required benefits include: Ambulatory Patient Services, Emergency Services, Hospitalization, Preventive, Wellness Services and Chronic Disease Management, Maternity and Newborn Care, Mental Health and Substance Use Disorder Services, Prescription Drugs, Pediatric Services including Oral and Vision Care, Laboratory Services, and Rehabilitative and Habilitative Services and Devices
- Have you informed your high-wage employees of new Medicare payroll and investment income taxes? A new Additional Medicare Tax goes into effect starting in 2013. The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation, and self-employment income that exceeds a threshold amount based on the individual’s filing status. The threshold amounts are 0,000 for married taxpayers who file jointly, 5,000 for married taxpayers who file separately, and 0,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of 0,000 in a calendar year. Make sure you adjust your payroll system accordingly.
- Have you considered Wellness Programs? You need to decide whether you want to offer expanded wellness incentives. Starting in 2014, businesses can offer discounts of up to 30% off insurance premiums to employees who take part in employer-sponsored wellness programs. This is an increase from the 20% discount previously allowed.
- Do your plans discriminate? Delayed pending further regulatory guidance, the ACA includes a requirement that employer provided benefit plans cannot discriminate in eligibility, waiting period, benefits or contributions in favor of highly compensated employees. Failure to comply carries a penalty of 0 per individual for each day the plan does not comply.
This checklist applies to new regulations under the Affordable Care Act only and does not include additional employer compliance requirements under ERISA, HIPAA and other federal labor laws. Ask your broker for additional information.
This document is not intended to be exhaustive nor should any information be construed as tax or legal advice. Readers should contact a tax professional or attorney if legal advice is needed. Although we have made every effort to provide complete, up-to-date, and accurate information in this document, such information is meant to be used for reference only. We make no warranty or guarantee concerning the accuracy or reliability of the information within this document. If there is any inconsistency between the information contained in this document and any applicable law, then such law will control.