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13
Fall 2012 Issue
PUBLIC POLICY
Most Frequently Asked Questions Related to the
Patient Protection and Affordable Care Act
Use this insight from Tabit, Arganbright and Hazelbaker to answer some of the questions you may have
There is so much to learn about the Patient Protection and
Affordable Care Act (PPACA) that it becomes overwhelming.
It’s for this very reason that the Ohio Restaurant Association
(ORA) asked Jay Hazelbaker, who represents long-time ORA
member Tabit, Arganbright & Hazelbaker, Inc. (TAH), to share
the questions his firm most often receives from small business
clients, along with a layman’s answer to each.
Q: Under the Patient Protection and Accountable Care Act
(PPACA), as an employer do I have to offer my employees
health insurance?
A: Employers who are determined to have less than 50
full time employees are NOT required to offer insurance to
their employees and they will not face penalties as a result.
Employers with 50 or more full-time employees [full-time
employees + full-time equivalents (FTE’s)] are required to offer
coverage to their employees or face penalties under the law.
Q: If I determine that I have over 50 full-time (FT + FTE)
employees, what penalties could I face?
A: Any employer with over 50 employees who does not offer a
plan will be assessed a $2,000 penalty per employee, per year,
with the first 30 employees being exempt from the calculation
[example: 65 FT employees – 30 = 35 employees. Annual
penalty = $70,000 (35 x $2,000)]. For employers who offer a
plan, but the employee’s share of the premium is in excess of
9.5% of their annual income, the employer may be subject to
a $3,000 penalty per employee if that employee is eligible to
receive a premium subsidy through the exchange.
Q: What is a full-time employee?
A: Any employee that averages 30 or more hours per week
for a given month, or works at least 130 hours per month, is
considered a full-time employee.
Q: How do I calculate my number of full-time equivalent
employees (FTE’s)?
A: For any employee who is not considered to be a full-time
employee, the employer must aggregate all of the hours
worked by all non full-time employees and divide the total
by 120 hours to determine the number of full-time equivalent
employees. Recent IRS guidelines have determined that
employers may “look back” no less than 3 months and no more
than 12 months to get a better picture of their typical monthly
non full-time employee base.
Q: How are seasonal employees treated?
A: Seasonal employee are treated the same as any other employee
in calculating the number of full-time or full-time equivalent
employees. However, if an employer is considered to have 50 or
more full-time employees for four (4) or fewer months of a year
as a result of seasonal employees, then that employer is NOT
considered to have over 50 full-time employees.
Q: Do I have to report the amount I, as an employer,
contribute towards health insurance on my employee’s W-2
for 2012? And if so, is this amount taxable?
A: For organizations that file fewer than 250 W-2’s
for 2012, they do NOT have to report the value of the
company contributions towards health insurance premiums.
Organizations who file 250 or more W-2’s must include
this amount on their employee’s 2012 W-2; however, these
amounts are NOT taxable to the employee.
Q: What is a Summary of Benefits and Coverage (SBC), and
as an employer, what obligations do I have, if any, regarding
a SBC?
A: A SBC is an 8-page document that provides easy to
understand information and explanations as to the benefits
being offered by an employer. For most fully-insured plans,
the SBC is created by the insurance carrier; however, it is the
obligation of the employer to distribute the SBC to employees
on a timely basis. Initially, the timing of when an employer
is required to provide a SBC will differ somewhat from one
employer to another based on when an employer’s first open
enrollment period begins after September 23, 2012.
Q: If my company offers a Flexible Spending Account (FSA),
what limitations, if any, does PPACA place on my plan?
A: For FSA plan years being on or after Jan. 1, 2013, medical
FSA elections are limited to $2,500, however the limits for
dependent care FSA’s are left unchanged with a cap of $5,000.
By Jay Hazelbaker,
Tabit, Arganbright & Hazelbaker
This article was provided to the Ohio Restaurant Association for use
by Tabit, Arganbright and Hazelbaker, (TAH) which provides group
insurance products, including insurance benefits to the ORA staff,
individuals with health, disability, long-term care and life insurance,
and businesses with business perpetuation and executive benefits
programs. Jay Hazelbaker is a principle in TAH and graciously
agreed to create this FAQ on the federal health care law.