Denver Staffing Agency - ACA FAQs 1 of 8 – Oct. 9, 2013
The Affordable Care Act imposes major new legal obligations on employers, including new excise taxes, which will increase the cost of supplying temporary and contract workers. The staffing industry is committed to compliance with the ACA, and the American Staffing Association is actively working to help staffing firms and clients understand the rules and how they will affect staffing services. These answers to frequently asked questions are designed to help staffing professionals understand the basic ACA requirements and compliance issues.
The requirements apply to all large employers— those with 50 or more full-time and full-time equivalent employees. The great majority of staffing firms will qualify as large employers. Large employers are subject to a non-tax-deductible excise tax in either of two cases if at least one full-time employee qualifies for subsidized coverage from a public health insurance exchange:
Employers that do not offer “minimum essential coverage” to at least 95% of full-time employees and their dependent children under age 26 will be assessed a monthly excise tax of $167 (up to $2,000 annually) multiplied by the number of the employer’s full-time employees (excluding the first 30).
Employers that do offer minimum essential coverage as described above will not be subject to excise taxes unless the plan is either “unaffordable” to the employee or does not provide “minimum value.” In such case, the employer will be assessed a monthly excise tax of $250 (up to $3,000 annually) for any employee who qualifies for a government subsidy to buy coverage in a public health insurance exchange.
Minimum Essential Coverage
Any employer group health insurance plan that covers medical care, which the law defines as “amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body.”
An employer’s plan will be considered unaffordable unless the employee’s share of the premium of a single-only plan does not exceed 9.5% of the employee’s wages.
The actuarial value of the plan’s share of cost of benefits must be at least 60%. Plan benefits must cover at least the following core services: physician and midlevel practitioner, hospital and emergency, pharmacy, and laboratory and imaging. The government has provided an online calculator for determining whether an employer plan meets the minimum value.
Source: American Staffing Association, Oct. 9, 2013
The information in the article above is intended for general education purposes only and should not be relied upon as a substitute for professional, legal, accounting, medical and/or insurance advice.