Health-care law update 2014: What you need to know

Health-care law update 2014: What you need to know

With this week’s U.S. Supreme Court ruling that closely held private companies are exempt from providing contraception, in employee health plans, if the owners have religious objections, the Affordable Care Act (ACA) is in the news in a major way. While this decision is important, there are, however, many other ways that the federal health-care law, enacted in 2010, will impact your business in 2014.

How the health-care law affects your restaurant depends, in great part, on whether it is classified as a small or large business. Small or large, however, one thing that holds true for all employers is that they must inform all employees about how they can access Washington’s state exchange.

Large employers

Large applicable employers” are defined by the health-care law as those businesses with 50 or more full-time-equivalent employees including full-time salaried and hourly workers and counting part-timers based on the hours they work.

First and foremost, large employers face an employer mandate that they offer all full-time employees and dependents affordable coverage of minimum value beginning on Jan. 1, 2015.

If employers fail to comply with this regulation, they will potentially face penalties of up to $2,000 per year for each full-time employee. Penalties will begin when at least one employee receives subsidized coverage through the premium tax credit on a state health-care exchange. In calculating their penalties, employers will be able to exclude the first 30 full-time employee.

Employers would also get hit with penalties of $3,000 per year for each full-time employee who seeks subsidized coverage through the exchanges if an employer’s plan is deemed unaffordable under ACA regulations. According to the ACA’s definition, “affordable” plans are self-only coverage that cost employees no more than 9.5 percent of household income.

Beginning in 2016, companies of up to 100 will be able to buy health plans for their employees through Washington’s state exchange. In 2017, the exchange may offer plans to employers with more 100 employees.

Small employers

According to the ACA, a small business is one with fewer than 50 full-time-equivalent employees. This includes full-time salaried and hourly employees in addition to part-time workers counted based on their total working hours.

If your business qualifies as a small one, you will be much less impacted by ACA health-care regulations than businesses that employ 50 or more workers. Most significantly, small employers are not subject to the ACA’s employer mandate.

Small employers offering coverage may qualify for a tax credit for contributing to their employees’ health coverage. This benefit is available to restaurants with up to 25 full-time employees, based on a 40-hour workweek, who also pay at least half of the cost of coverage for their full-time salaried and hourly employees. Beginning in 2016, employers who take advantage of this tax credit must purchase their coverage through the state exchange. The maximum credit for the smallest restaurant with the lowest wages is 50 percent.

Small businesses that offer health plans are prohibited from imposing annual/lifetime limits on coverage. The plans must cover employees with preexisting conditions. Coverage cannot be rescinded, and children must be allowed to remain on parents’ plans until they are 26 years-old.

Keep in mind that small businesses are also subject to non-discrimination rules, a 90-day limit on maximum waiting periods, and restrictions on flexible savings accounts, health savings accounts and health reimbursement. They must also offer a “plain English” summary of benefits and coverage to employees and are required to report the value of health care coverage on W-2 forms.

Look out for some new taxes and fees under the law. Medicare rates have gone up, and some new taxes and fees imposed on health care plans under the ACA, including the “exchange reinsurance fee,” which is in effect from 2014 through 2016, may hit small businesses that purchase insurance.

Whether your restaurant is a small or large business, it is of utmost importance that you stay on top of the changes wrought by the ACA. Don’t take anything for granted. While this law is complex, it is the law, and you are responsible for following it.

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