10B October 13 - 26, 2015
Owners, Developers & Managers / Design-Build
New York Real Estate Journal
Visit the paper online nyrej.com
Professional Services
The Affordable Care Act (ACA) – Is your
organization ready to “play or pay?”
Steven Goldstein
Grassi & Co.
Whether we want to accept it
or not, the Affordable Care Act
(ACA), or Obamacare, is here to
stay. The intention of the ACA is
to offer quality health insurance to
full-time workers within a minimum
standard offering, Minimum Essential Coverage (MEC), with the same
rates—regardless of pre-existing
conditions or sex. Throughout the
last five years, several amendments
have been made to the act, making it
mandatory for all employees to have
some type of coverage, whether it
is privately owned or through their
employer. The concept is simple: To
play, the employer must offer health
coverage to full-time employees
(FTE) that work an average of 30
or more hours per week. Employers
who fail to offer coverage will pay
penalties if any FTEs receive government subsidies to buy individual
insurance through the exchange or
marketplace.
Questions to consider regarding
compliance:
• Does the employer offer basic
health coverage to most FTEs and
their children? If not, the employer
is at risk for a large penalty.
• Does the employer offer all
FTEs and their children affordable
coverage providing minimum value? If not, the employer is at risk
for a different penalty.
Filing Requirements
Employers must provide forms
1095-C to their employees and file
form 1094-C with the IRS. This new
requirement applies to both insured
and self-insured medical plans.
Certain vendors may offer services such as:
• Storing the fields.
• Identifying the offer of health
coverage to employees and enrollment for all covered individuals.
• Usage of the data stored to
generate the IRS Form 1095-C and
provide final output via a data file to
the employer or a completed 1095-C
form directly to the employee.
Some of the more well-known
vendors include ACA Managed
Services, Empyrean, and Worxtime.
Who are the employers that will
be most impacted by these requirements?
• All employers with more than
50 employees.
• Employers with active or aggressive turnover in employment
(i.e. security guards, construction
companies, manufacturing and
distribution, restaurants, etc.) White
collar companies may not have the
same complexities.
• Union and non-union employees
Form 1095-C should be provided
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to recipients/employees no later
than February 29, 2016 consistent
with W-2 and 1099 reporting.
What are the possible
penalties?
Companies can be fined penalties if:
• An applicable large employer
(ALE) does not offer MEC to at
least 70 percent of FTEs and dependents in 2015 and at least 95
percent in 2016.
• Each FTE is not offered affordable coverage or the health
plan offered does not cover at least
60 percent of the allowed costs of
plan benefits
• The employer shared responsibility or penalty can be as much as
$2,000 per employee.
Even if an ALE member offers
minimum essential coverage to a
sufficient number of FTEs (and their
dependents) so as not to be liable for
the employer shared responsibility
payment described above, the employer will generally still owe the
second type of employer shared
responsibility payment for each FTE
(if any) who receives the premium
tax credit for purchasing coverage
through the Marketplace. In general, a FTE could receive
the premium tax credit if:
(a) The minimum essential coverage the employer offers to the
employee is not affordable.
(b) The minimum essential coverage the employer offers to the
employee does not provide minimum value.
(c) The employee is not one of the
at least 95 percent of employees offered minimum essential coverage. If an ALE member owes this
second type of employer shared
responsibility payment, the annual
payment will be $3,000 for each
FTE who received the premium
tax credit.
Penalties for failure to file/furnish
an annual IRS return (1094-B or C)
or to provide individual statements
to all FTE’s (1095-C) were recently
increased ranging from $50 per form
(with a $500,000 annual maximum)
to $250 per form (with a $3M annual
maximum.)
What is Transition Relief?
Transition relief provides a oneyear delay in enforcing penalties to
qualifying ALEs with 50-99 FTEs.
Even if you qualify for transition
relief, you must file the appropriate
forms for the 2015 tax year.
Whatever the case, it is important
for ALEs to understand what is
expected of them and begin preparing now!
Steven Goldstein, CPA, PFS, is
an audit partner at Grassi & Co.,
New York, N.Y.