The Affordable Care Act – The Impact on the Company and your Call Center - Fenero - ContactCenterWorld.com Blog
By Saundra Bush
In the event you have not researched all the requirements of the Affordable Care Act and the possible implications on your company and call center operation, I have done extensive research on the Affordable Care Act and have condensed below the key elements of the Act below.
Clearly the Affordable Care Act may present challenges with staffing models based on how your company will classify full timers and the hours they can be scheduled on a weekly basis. I am sure that at this point in time you have had conversations with your counterparts in the Human Resources and Finance department as to how this Act will impact your company and the call center organization in 2014 and 2015.
Affordable Care Act – Employer Shared Responsibilities Provision (§ 4980H)
January 1 2015 effective date for employers………..
On July 2, 2013, the Department of Treasury announced that the effective date of the Affordable Care Act (ACA) employer mandate and the employer reporting requirements will be delayed until January 1, 2015. Under the Employer Shared Responsibility Provisions, as a large employer (see definition of large vs. small employer), you must offer affordable health coverage to your full-time employees or be prepared to be subjected to paying a shared responsibility penalty if one or more of your full-time employees receive a premium tax credit.
The § 6056 Information Reporting is integral to the administration of the Employer Shared Responsibility Provisions. As a large employer, you will not know whether a full- time employee received a premium tax credit, because you will not have access to all of the information needed to determine whether you owe a payment under the Employer Shared Responsibility provision. Accordingly, you will not be required to calculate a payment or file returns submitting such a payment. Instead, after receiving the information from your returns filed under § 6056 and the information about your employees claiming the premium tax credit for any given calendar year, the Internal Revenue Service (IRS) will determine whether any of your full-time employees received the premium tax credit and, if so, whether an assessable payment under § 4980H may be due. If the IRS concludes that you owe such an assessable payment, it will contact you, and at that time, you will have an opportunity to respond to the information the IRS provides before a payment is assessed.
For this reason, the transition relief from § 6056 Information Reporting for 2014 is expected to make it impractical to determine which employers owe shared responsibility payments for 2014 under the Employer Shared Responsibility Provisions. Accordingly, no Employer Shared Responsibility payments will be assessed for 2014. However, in preparation for the application of the Employer Shared Responsibility Provisions beginning in 2015, employers and other affected entities are encouraged to voluntarily comply for 2014 with the information reporting provisions (once the information reporting rules have been issued) and to maintain or expand health coverage in 2014. Real- world testing of reporting systems and plan designs through voluntary compliance for 2014 will contribute to a smoother transition to full implementation for 2015.
What does this mean for you, the employer? It means that in 2014 (transition relief), you will not be subjected to penalties for failure to comply with the Employer Shared Responsibility provisions; however, you should take this time to examine your need to either implement changes to your current health coverage, determine if you’ll now need to offer coverage, and build strategies that include examining your current and future staffing needs.
You can also take advantage of this additional time in 2014 to develop your reporting systems (once the information reporting rules have been issued) and voluntarily conduct a trial run in preparation for the application of the provisions in 2015. However, information reporting will be optional for 2014; accordingly, no penalties will be applied for failure to comply with these information reporting provisions for 2014.
How to determine if you are a small or large employer……….
As an employer, your responsibilities and benefits per The Affordable Care Act will be determined by the size and structure of your workforce. Companies with less than 50 FTE (full time equivalent) employees are classified as small unless the company is a member of an ownership group with 50 or more full time equivalent employees and, if so, then you are subject to the rules for large employers. Large companies are defined as employers with 50 or more full time equivalent employees.
How to calculate full time equivalent………….
To calculate the number of full time employees for this purpose, first calculate the number of employees that are classified as full time (working 30 hours or more per week), next calculate the number of full time equivalent (FTEs) by adding the number of part time hours worked for the month and dividing that number by 120.
The total number of full time employees plus the calculated amount of FTEs will determine if your company is classified as a small or large employer for ACA purposes.
Employer Shared Responsibility Payment
The Employer Shared Responsibility Payment applies to some large employers who don’t offer insurance that meets certain minimum standards. The payment is scheduled to begin in 2015. If you have 50 or more full-time equivalent (FTE) employees, you may have to make this payment if:
At least one (1) of your employees qualifies to save money on monthly premiums in the Marketplace.
(Health insurance marketplaces, also called Health Exchanges, are organizations set up to facilitate the purchase of health insurance in every state of the United States in accordance with Patient Protection and Affordable Care Act (Obamacare/ACA ). Marketplaces provide a set of government-regulated and standardized health care plans from which individuals may purchase health insurance eligible for federal subsidies.)
Your employees won’t be able to save money on monthly premiums in the Marketplace if the coverage you offer your full-time employees in 2015 is affordable and meets minimum value.
How to know if your coverage is affordable………………
If an employee’s share of the premium costs for employee-only coverage is more than 9.5% of their yearly household income, the coverage is not considered affordable.
Since you typically won’t know your employee’s household income, you can generally avoid a Shared Responsibility Payment for an employee if the employee’s share of the premium for employee-only coverage doesn’t exceed 9.5% of their wages for that year as reported on the employee’s W-2 form.
Amount of the Employer Shared Responsibility Payment
The amount of the annual Employer Shared Responsibility Payment is based partly on whether you offer insurance.
If you don’t offer insurance, the annual payment is $2000 per full-time employee (excluding the first 30 employees)
Since 2000, SCC Services Group has been successfully providing services to the Automotive, Banking, Financial Services, Travel, Telecommunication and Retail Call Center organizations. This depth of experience is complemented by our commitment to service excellence, a healthy corporate culture, and a highly skilled team. If you are interested in learning more about SCC Services Group consulting or business services offerings and how we can assist your organization improve its overall performance please send an email to: email@example.com
Publish Date: October 19, 2014 5:00 AM
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