The Devil is in the Details: Advising Your Clients on the Affordable Care Act

by LeClairRyan
Contact

The Affordable Care Act (ACA) represents a fundamental shift in healthcare delivery and insurance. The law is complex and many of its provisions are delayed due to implementation difficulties. However, virtually all businesses will be affected by the ACA; small businesses need advice on compliance, reporting and implementation issues. CPAs are in a unique position to understand the client’s business differently than insurance and payroll consultants. Take time to develop your ACA expertise now, so that you can better serve your clients.

In providing consulting services under the ACA, it’s helpful to think of businesses in three distinct groups:

1. Employers with over 100 employees typically provided employee health insurance prior to the ACA, often via self-insured plans or participation in multi-employer plans under collective bargaining agreements. These plans face unique challenges under the ACA. Employers need to understand how to ensure their plans are compliant, and that their timekeeping and payroll systems capture the right data for upcoming reporting obligations.

This group is also vulnerable to litigation over wage and hour claims, ACA claims and other fiduciary claims, including class actions. Employers in controlled groups are obligated to report individually.

2. Employers with more than 50 full-time employees, but fewer than 100 employees, are a diverse group that may already provide some health insurance coverage. While businesses in this group realize the ACA impacts them, they may not realize the full extent of their obligations.

They may be exploring different options for coverage, including self-insurance.

3. Employers with fewer than 50 full-time employees often believe they are not required to comply with the ACA employer mandate because of their size. However, there  are employers in this group who could be subjected to the employer mandate. As a CPA, your small business clients will rely on you to analyze risks and advise on the best ways to deal with them.

This group may also have independent contractors who could be reclassified as employees. If that happens, there could be ACA penalties and claims by employees for failing to offer health insurance and other benefit plans. Even employers who could qualify for Section 530 relief in classification issues, based on industry practice, may be ineligible for relief because the business fails to issue a 1099. Both the IRS and state unemployment agencies are increasing enforcement in the employee classification area. An alert CPA can prevent a host of problems for those businesses.

Potential Pitfalls
There are six areas of concern that CPAs should be prepared to handle:

Time keeping. Employers are vulnerable to wage and hour claims for overtime. Often this is an evidentiary issue of the employee’s records of time worked versus an employer’s timekeeping records. With the ACA’s definition of full-time as a 30-hour work week, the issue of timekeeping is more important. CPAs are well-positioned to advise businesses on the quality of internal controls.

Payroll. Many small businesses do their own payroll, often using QuickBooks payroll type programs. While the QuickBooks payroll program is flexible, it is potentially a weapon of mass destruction in the hands of an untrained bookkeeper. Many CPAs find the bookkeeper has inputted incorrect rate information, leading to under withholding or underpayment of taxes. Errors and vulnerabilities in the payroll arena are magnified under the ACA with increased reporting obligations imposed both in W-2 reporting and the new Form 1095.

Unclear aggregation rules. Smaller employers may not be aware of the aggregation rules that may apply to commonly owned or commonly managed entities. Separate  employers can be aggregated for certain purposes, like determining whether the employer has 50 or more full-time equivalent employees. As the application of the aggregation rules in the ACA is unclear, this is an area of concern where restructuring may be advisable.

Click here to read more.

Source: Sum News (Spring 2014)

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.

© LeClairRyan | Attorney Advertising

Written by:

LeClairRyan
Contact
more
less

LeClairRyan on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!