Affordable Care Act Update: Time to Regroup (video)

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Video transcript:

Hi, I’m Jess Rogers. I’m an attorney with Sands Anderson.

As you probably know by now, on July 2nd the Obama administration announced a one year delay in the Affordable Care Act’s employer responsibilities payments as well as many of the employer reporting requirements. Now what this means is that employers will not be penalized for not offering healthcare coverage to their employees prior to 2015.

This announcement was a welcomed relief for many employers, especially those employers who have been struggling to figure out what the Act means, a little more time to comply.

But keep in mind, in order to offer healthcare coverage to all eligible employees by January of 2015, employers will need to begin measuring the hours of part-time employees by October 2013.

Now, I said part-time employees. Technically, under the Act, employers are only responsible for measuring the hours of those variable-hour employees.  Those are employees whose hours cannot be predicted in advance, for whatever reason.

But keep in mind the way penalties will work under the Act. For a part-time employee who’s never worked more than 30 hours a week goes the Exchange in his state to buy health insurance and he applies for a subsidy to help him pay for that insurance and on the application he states that he works full-time. The IRS will then go to his employer to either verify or disprove that full-time status. If the employer hasn’t been tracking his hours and can’t prove how many hours he’s actually working, they’ll be forced to simply pay the penalty for that employee.

So it would be wise for employers to use this delay to get a system in place to accurately track the hours of all part-time employees prior to 2015.

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Published In:

Tax

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sands Anderson PC | Attorney Advertising

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