Q1 & Q4 Affordable Care Act Facts for Employers

Q1 & Q4 Affordable Care Act Facts for Employers

Under the Affordable Care Act of 2010, there have been a number of payroll management and employer health insurance requirements that have been rolled out over the last three years in a strategic health care reform timeline. However, this doesn’t all fall onto the shoulders of employers.

To make health care insurance more affordable for all eligible Americans, the ACA was designed so that the government, health care insurers, employers and individual workers all share in the responsibility to make positive changes in the health care industry. To enforce these health care reform provisions, there are also penalties to employers in the Affordable Care Act for non-compliance.

Affordable Health Care Act Timeline for Q4 2013 and Q1 2014

If you are confused about what these ACA requirements, shared responsibilities and possible penalties are as we approach the final Q4 payroll cycle of 2013 and get ready for Q1 of 2014, here is a basic Affordable Care Act timeline you can reference.

October 1, 2013: Open enrollment officially began. All eligible individuals are tasked with enrolling in adequate health care insurance, with 23 states (including Florida, New York, New Jersey, and Pennsylvania) currently offering open health care marketplaces where consumers can choose from a variety of benefit offerings.

Important! Employees will have their health care plans effective based on their enrollment dates and when their first premium is received:

  • Enrollment between October 1,2013 to December 15, 2013: Benefits begin January 1, 2014
  • Enrollment between December 16, 2013 to January 15, 2014: Benefits begin February 1, 2014
  • Enrollment between January 16, 2014 to February 15, 2014: Benefits begin March 2014
  • Enrollment between February 16, 2014 to March 15 2014: Benefits begin April 2014

For individuals who are 65 or older and eligible for Medicare, they have from October 15 to December 7 of 2013 to enroll in their Plan B benefits in order to receive this added coverage.

January 1, 2014: New health care coverage plans start for those who have enrolled in plans between the dates of October 1, 2013 to December 15, 2013. Payroll managers are urged to have benefit plan information and the first premium payment updated to their payroll administration systems by December 15th of 2013 to ensure smooth handling of this requirement.

March 31, 2014: Open enrollment officially ends. After this date, employees can only enroll in private health insurance under the ACA for 2014 through a special enrollment period (such as 30 days from date of hire) or within 60 days of a qualifying life event.

Requirements and Penalties for Affordable Health Care Act Compliance

While there are some exemptions allowed under the current ACA guidelines, there are also stiff penalties for not providing access or reporting the costs of affordable health care for eligible individuals and their families. Starting for tax year 2012, the IRS requires that employers record the cost of health care coverage for employer health insurance on the employee’s W2 form for companies with more than 250 employees. Eligible employers who fail to report this cost or provide access to affordable health care options face fines and may be forced to reimburse employees for a certain percentage of their coverage paid out of pocket.

Individuals are also required to show that they either have a minimally acceptable health care plan, qualify for an exemption, or plan to make a payment when filing their income taxes in 2014. Penalties for individuals not doing so start at $95 or 1 percent of household income for the first year, then in 2015 increase to as much as 2 percent of household income or $325 per person.

SourceOne Partners is comprised of an experienced team of PEO and payroll professionals that can help outsource payroll for your small business. With offices in South Florida and New Jersey, we can help you find a solution to better manage your payroll services, employee benefits and company taxes so that you can save time, money and avoid the penalties of non-compliance. Please call 561-674-0748 to speak with a payroll expert or click here to contact us online.