PPACA: Legal

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  • 1. May  22,  2013  Addie  Prewi)  Legal Update
  • 2. 2  Do I Pay or Play? •  To play, offer minimum essential coverage tosubstantially all full-time employees. •  Must pay if: 1.  Don’t offer coverage – pay $2,000 annually perfull-time employee over 30 full-time employees. 2.  Offer unaffordable coverage or coverage thatlacks minimum value – pay $3,000 annually perfull-time subsidized employee Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  
  • 3. 3   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  When must I decide to pay or play? •  Penalties effective on January 1, 2014 unlessqualify for certain transitional relief for fiscalyears plans.•  However, employers must know by October1, 2013, whether they will pay or play inorder to issue required notices to allemployees regarding coverage options andexchanges.•  See https://www.dol.gov/ebsa/healthreform/index.html fortechnical release and model notices.
  • 4. •  Employee that works more than 30 hoursper week or 130 hours per month is a full-time employee •  Part-time/full-time equivalent employeesirrelevant for calculating penalty; ONLY usedto determine if an applicable large employer 4   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  Who is full-time for penalty?
  • 5. •  Actual hours worked •  Safe-harbor measurement period o  Measurement or look-back period – measure(on average) whether employees are full-timeor noto  Administrative period – identify and enroll full-time employeeso  Stability period – penalty may be due foremployees found to be full-time duringmeasurement period5   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  What period used for full-time?
  • 6. MeasurementPeriod AdministrativePeriod StabilityPeriod On-goingemployees 3 to 12 months Up to 90 days At least 6 monthsbut not shorter thanmeasurement period New employeeshired as full-time N/A Up to 90 days toenroll N/A New variable hourand seasonalemployees 3 to 12 months Up to 90 days butmeasurement andadmin period cannotexceed 13 months 3 to 12 months butnot longer thanmeasurement period 6   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  What period used for full-time?
  • 7. 7   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  Transition relief in 2014 •  For 2014, employers can use a transitional measurement periodthat is shorter than the stability period for determining full-timeemployees if the following requirements are met:1.  The measurement period is at least 6, but less than 12 months,2.  The measurement period begins on or before July 1, 2013, and3.  The measurement period ends no sooner than 90 days beforethe beginning of the employer’s 2014 plan year.•  For fiscal year-plans, the transitional relief effectively delays thefirst date on which the employer can be subject to a penalty to thefirst day of the fiscal year plan in 2014.
  • 8. Plan Year Transitionalmeasurementperiod Administrative period Stabilityperiod Calendar year April 15, 2013 –Oct. 14, 2013 Oct. 15, 2013 –Dec. 31, 2013 Jan. 1, 2014 – Dec.31, 2014 Calendar year May 15, 2013 – Oct.14, 2013 Nov. 15, 2013 –Dec. 31, 2014 Jan. 1, 2014 – Dec.31, 2014 FY beginning April1, 2014 July 1, 2013 – Dec.31, 2013 Jan. 1, 2014 – March31, 2014 April 1, 2014 –March 31, 2015 FY beginningJuly 1, 2014 June 15, 2013 –April 14, 2014 April 15, 2014 –June 30, 2014 July 1, 2014 – July 1,2015 FY beginning Nov.1, 2014 Sept. 1, 2014 – Oct.31, 2014 Sept. 1, 2014 – Oct.31, 2014 Nov. 1, 2014 – Nov.1, 2015 8   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  Examples of 2014 transitional relief
  • 9. 9   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  Next steps for employers •  Work with the payroll department to ensure an appropriatesystem is in place to track the numbers of hours fordetermining and substantiating employee’s status as full-timeor less than full-time.•  Consider the timelines to adopt for the first measurementperiod, subsequent measurement periods for ongoingemployees, and initial measurement periods for variable orseasonal employees.
  • 10. 10   Office:  225.381.0281  Email:  addie.prewi:@taylorpoter.com  Circular 230 disclosure and disclaimer Any tax advice contained in this communication is not intendedand cannot be used by any taxpayer to avoid penalties under theInternal Revenue Code or Treasury Regulations.This is provided for educational and informational purpose onlyand should not be considered legal or accounting advice. Youshould consult with legal counsel and accountants for theirinterpretation of the applicable law, rules, regulations, guidanceand consideration of other relevant facts before acting on anyinformation contained herein.
  • 11. Thank youAddie  Prewi)  Attorney, Taylor PorterTax & Health Care Practice Teamaddie.prewitt@taylorporter.com225.381.0281