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ACA Business Strategies
- 4. Earned Wage (Y Axis) • Skilled and Professional “3” – 301% FPL and Up (over $34,470 W2) • Semi Skilled “2” – 101% to 300% FPL (up to $34,470 W2,best cutoff for affordability) • Disadvantaged Wage Class “1” – 0 to 100% FPL ($11,400 W2) 4 0 + 100% 300% Earned Wage
- 6. Paid Hours (X axis) • Part Time – Less than 30 hours per week • Full Time – Greater Than 30 hours per week 6 0 + Paid Hours 30
- 8. FIRST STEP: Are you Large? • For ACA sake, small only means “NOT Large” • Common Law Employer is defined by IRS Revenue Ruling 70‐630 • Think, “Who is the Pay Master” that is the employer • Control Group aggregation rule defined by IRC 414 • FTE’s are Count of Full Time (S) plus Part Time (P) on pro rata basis • Seasonal workers DO NOT COUNT in large employer determination
- 11. Determination • Count FT Workers = S3 + S2 + S1 • Count FTE’s = Total Hrs (P3+P2+P1) excluding seasonal workers* hours divided by 30 LARGE EMPLOYER if…. FT Workers plus FTE’s GREATER THAN or Equal to 50 *Note: Less than 120 days of employment for businesses with typical seasonality 11
- 20. Pay Strategy Paid Hours Earned Wage P3 P2 P1 L3 0 + + L2 L1 Fine = (Sum of all workers – 30) x $2000
- 25. IRS Delays Penalties til 2015! • Will likely cause a few things 1. Removes urgency, Employers may blink 2. Exchanges open offering HUGE subsidies for enrollees 3. Your EID will be reported through the application process “Appendix A” 4. Every Appendix A completed in 2014 will likely cost you $5200 pretax (as a Large Employer) in 2015
- 26. Productiv Inc Example Paid Hours Earned Wage Medicaid Cutoff 300% FPL Cutoff Part Time Cutoff P3 P2 P1 L3 0 + + L2 L1 L3 9 L2 135 L1 29 P3 0 P2 39 P1 206
- 38. L2 Process Outsourcing Reduces Production Labor Cost Cost per 1000 Touches World Class Where are you? 25th 50th 75th 90th 99th
- 39. Other Benefits of L2 Outsourcing • Structure Establishes a Regulatory Fire Wall (P&C, Workers Comp, CGL, SUTA, Tax) • Allows Custom Programs for L2 wage positions • Drives Productivity and Quality simultaneously • Provides State of the Art Process Technology • Fosters Entrepreneurialism • Creates clear control mechanisms • Lowers Cost of Sales • Drives Small Business Growth
- 40. Call to Action • Meet with your Executive Team • Share what you have learned about L2 • Help them complete their own case study • Help guide them to the their best solution • Go to PBJandACA.com for additional assistance 40