Understanding of Affordable care act.
On March 23, 2010, the Patient Protection and Affordability Care Act (PPACA), commonly known as health care reform, was officially signed into law. Since that time, health care reform and its impact on businesses and individuals continues to evolve. With the clock ticking down to the implementation date of January 2015, it is imperative businesses understand how they will be affected and are prepared to make strategic health care decisions.
What does this mean to an employer?
Employers with 100+ Fulltime employees or Fulltime equivalents must offer affordable and "minimum essential coverage" for the employees and their dependents. (Statutory definition = "full-time employee means, with respect to any month, an employee who is employed on average at least 30 hours of service per week") or face a penalty.
Must Offer fulltime employees or fulltime equivalents "Affordable and "minimum essential coverage" for the employees and their dependents
Beginning on 1/1/2015, or be subject to a tax penalty.
$2,000-$3000 Penalty per every qualified fulltime equivalent Employee.
What does it mean to you as an Employee?
All U.S. citizens and legal residents are required to have "minimum essential coverage" for themselves and their dependents for each month beginning on 1/1/2015 or be subject to a tax penalty
Minimum essential coverage can be (i) eligible employer-sponsored group health plans (including grandfathered plans), (ii) individual-market insurance policies, or (iii) certain governmental programs (e.g., Medicare, Medicaid, CHIP, TRICARE)
Limited exceptions apply (e.g., Native Americans, certain religious exemptions, individuals unable to obtain coverage costing less than 8% of their household income, individuals with household income before tax filing threshold, short (< 3 month) lapses, expatriates)
Tax penalty for noncompliance is:
a percentage of income amount in excess of taxpayer’s filing threshold (1.0% in 2014, 2.0% in 2015, and 2.5% in 2016 and beyond); or
an applicable dollar amount ($95 in 2014, $325 in 2015, and $695 in 2016 and adjusted for inflation thereafter)