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WHAT CAN YOUR BUSINESS EXPECT IN HEALTHCARE

The recent news is full of information and updates about healthcare, but is lacking in specifics about the requirements businesses must meet under the new laws. Here are some specific details about changes in healthcare employers should know in the New Year:

1. In 2013, the Medicare Insurance Tax will increase from 2.9 percent to 3.8 percent on employees compensated more than $200,000 ($250,000 for joint filers). The Net Investment Income Tax will increase and create a new higher threshold for itemized deductions on medical expense deductions.

2. In 2013, The Affordable Care Act will require employers to report the cost of coverage under an employer-sponsored group health plan for 2012.

3. There are limited credits and deductions under the new law. Employers with 25 employees or less, that pay average annual wages below $50,000 and provide health insurance, may qualify for a small business tax credit (Up to a maximum of 35 percent or 25 percent for non-profits. This will increase to 50 percent and 35 percent, respectively, in 2014) to offset the cost of insurance. Under the healthcare law, employer-based plans that provide health insurance to retirees ages 55-64 can now receive financial assistance through the Early Retiree Reinsurance Program.

4. In 2014, a penalty for individuals who do not have minimum health insurance (individual mandate) will go into effect.

5. Starting in 2014, employers with 50 or more full-time employees (defined as an average of 30 hours per week) must provide health insurance. Failure to provide the right policy will result in penalties to the business of $3,000 per employee not insured. Employers with less than 50 employees will be exempt.

6. In 2014, the Affordable Insurance Exchanges will begin. These are Internet-based products meant to provide employers with alternatives to private health insurance, serving only small employers (less than 100 employees), first. Individuals can shop for insurance at the Exchange. Employees can opt to purchase insurance at the Exchange instead of employer-provided insurance, at a cost to the employer. Employers must give notice to their employees about the availability of the Exchanges.

7. In 2014, employer-provided plans will be required to have certain elements: providing preventative healthcare without charge; providing coverage for employees’ adult dependents under age 26; coverage for certain preventive services, such as mammograms and colonoscopies, without any deductible, co-pay or coinsurance; and insurers can’t impose a maximum lifetime dollar limit on a customer’s medical care. In addition, employers must give new notices to employees about the value of their healthcare benefit. These requirements involve employers working closely with their health insurance providers to ensure they follow all the new federal law requirements.

Employers should know that these new laws provide whistleblower-like protections to employees by prohibiting employers from discharging or discriminating against an employee who receives a federal healthcare tax credit or subsidy – or, an employee who complains to the employer, federal government or state attorney general about an employer’s conduct with regard to healthcare.

Employers should contact their health insurance providers as well as their tax and legal advisors as soon as possible regarding their changing healthcare responsibilities.

If you have questions for Matt, please contact him at mkinley@tldlaw.com or (562) 901-3050.

 

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