Healthcare Reform: Large Employer Mandate

We’ve seen several changes in the healthcare reform timeline.  We saw the most recent change or delay at the beginning of July impacting the large employer mandate.  Although the mandate has been delayed to January 2015, it is extremely important to be aware of the upcoming tax changes resulting from the health care reform.  By now, as an individual or a business, you should have reviewed and analyzed if and how these provisions will impact you, and if you haven’t, now is the time to take action

Beginning in 2015, larger employers that do not offer health insurance coverage will be faced with a penalty as the business is liable for an annual assessable payment if any full-time employee is certified to the employer as having bought health insurance through an Exchange and either the employer:

1. Fails to offer full-time employees the opportunity to enroll in minimum essential coverage under an eligible employer sponsored plan; or

2. Offers its full-time employees the opportunity to enroll in minimum essential coverage under an eligible employer sponsored plan that is unaffordable.

Are you a large employer?  If you employ an average of at least 50 full-time employees on business days during the preceding calendar year, the answer is “yes”.  All employees are taken into account as the hours of those who are not full-time will be factored in to calculate the total number of full-time equivalent employees.

It is critical for employers to perform an analysis and determine whether the business will be deemed a “large” employer.  Have you calculated the number of full-time employees or the number of employees that you will be required to pay a penalty if choosing not to offer health insurance coverage?  Is it more cost effective for your business to offer or to not offer health insurance coverage for your employees?  As discussed, these significant tax law provisions will quickly go into effect whether you are ready or not.  Get ready – this won’t be a pleasant surprise!