A client recently made this comment to us: “My business only has 5 employees. There’s no way that I have to worry about the Obamacare law at this point.” Here’s the bad news. If you have just one employee and over $500,000 in gross revenue, you’ve got an Obamacare reporting requirement due October 1.
Even with just one or two employees, you could be required to give the employee(s) an informational notice by October 1 on the newly created public health exchanges!
You might be thinking, “I already provide insurance for my employees so I’m ok on this.” Sadly, you couldn’t be more mistaken.
Companies with one (or more) employees and $500,000 in annual revenue must provide a written notice that educates employees on the existence and use of the health exchanges and how to apply for coverage if they desire to do so.
There are two types of notices: One for employers that provide coverage and one for those who don’t.
All notices must explain the following at a minimum:
- The existence of the exchange;
- A description of the services provided by the exchange;
- How to contact the exchange to request assistance;
- The employee’s potential eligibility for subsidized coverage on the exchange if your company’s group health plan doesn’t provide “minimum value” (i.e., the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs); and
- The fact that the employee may lose the employer contribution (if any) toward health insurance coverage if he or she chooses to purchase individual coverage on the exchange.
Potential penalties may be up to $100 per worker per day.
We’ve modified the sample letters below from the Department of Labor and have a template for use by our clients. We have another form for your employees regarding cobra coverage available upon request.
These links will enable you to download the sample notices.
Employers who don’t provide coverage (PDF Format)
Employers who do provide coverage (PDF Format)
Employers who don’t provide coverage (MS-Word Format)
Employers who do provide coverage (MS-Word Format)
Remember – You don’t have to face ever-increasing tax challenges alone. This is not a one-time event as future hires must be notified as well.
Clients are welcome to Contact Us for help in adapting these forms for use with your business. Our existing clients are welcome to forward this post to their business colleagues. Non-clients can contact us at the link above for assistance in adapting the forms for your company. A retainer is required for new clients.
David Conley
He is also a founding Board Member and Finance Director of the Fayette Pregnancy Resource Center and serves on the Board of the National Equal Rights Institute.
Latest posts by David Conley (see all)
- The biggest no-brainer for 2019 tax planning:
It's never too early to start saving 2019 taxes
- January 16, 2019 - What a difference a name makes!:
Are you a dealer or investor? Here's how to tell the difference!
- January 10, 2019 - Is it too late to accrue a bonus for last year?:
Not if done correctly
- January 9, 2019
Just received the following Tweet from one of our friends in CA. See this link – https://www.cpatax.net/2013/04/obamacarecost/ – for why he’s lucky to get the deal he got.
Twitter Post
David Schmidt ?@DavidSchmidt 28 Sep
SHOCK: My wife just got a letter from @BlueShieldCA saying her monthly health insurance premium to more than DOUBLE.
Several clients have asked about question 14 on the DOL’s form and are wondering if they meet the minimum value standard of insurance under Obamacare. Here are the 10 primary standards for your existing plan to be considered of minimum value.
The plan should provide:
1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care