The Affordable Care Act For Construction Employers By: Jack - - PowerPoint PPT Presentation

The Affordable Care Act

For Construction Employers

By: Jack Widman, Esq. Mark Levengood, Esq. Jennifer Abrams, Esq.

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Overview

• Employer Mandate
• Shared Responsibility Information Return
• W-2 Reporting
• FLSA Notices

2

Enforcement Transition Relief

• 2014

– Suspended

• 2015

– Suspended for Applicable Large Employers with 99

• r fewer full-time employees on average
• 2016

– Fully effective

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Employer Mandate Generally

• Applicable Large Employers
• Must offer Affordable and Minimum Value

coverage

• To Full-Time Employees and their dependents
• Or face Penalties

– Penalties are triggered by tax credits in the exchanges

4

Who is a Large Employer?

• Prior calendar year average

– 2015: 99 or more full-time employees (including full- time equivalents) – 2016: 50 or more – 2 groups to track

• Employees averaging 30 hours weekly in a month
• All other employees’ hours divided by 120

– Full Time Equivalents

– Track all hours

• Exempt and non-exempt
• CBA and non-CBA

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How do you calculate Large Employer Status?

• 12 monthly snapshots
• 2015 Relief - 6 monthly snapshots from 2014

– Consecutive

• Controlled Group rules apply
• Seasonal worker exception (4 months)

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What is Affordable, Minimum Value coverage?

• To avoid penalties, the coverage offered to full-

time employees must be affordable and minimum value

– Affordable

• 9.5% of household income (safe harbors: W-2, rate of pay)
• Self-only coverage

– Minimum Value

• 60% of projected costs for a standardized population (self-

insured GHP)

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Who is a “full-time” employee?

• CBA versus non-CBA

– Multiemployer Safe Harbor (discussed later)

• 30 hours on average weekly in a month

– Current tax year

• New full-time employees

– Enroll by first day of fourth full calendar month following start date

• No penalties prior to that date

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Dependents of full-time employees?

• Offer of coverage required

– No minimum level of coverage

• Transition relief for the 2015 plan year

– an employer will not be penalized for failing to

• ffer coverage to dependents of full-time

employees

• Provided employer is “taking steps” in 2014 and 2015

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Multiemployer Safe Harbor

• Safe Harbor Components

– Large Employer – CBA or Participation Agreement (bargaining unit alumni,

• ffice staff)

– Contributions required – Plan offers affordable, minimum value coverage – Plan offers coverage subject to plan’s eligibility conditions

• FT status in current month does not trigger a penalty
• Delinquency?

– No guidance

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De Minimis Transition Relief

• Relief from “No Coverage” penalty

– Allows for a margin of error

• 2015 only

–No penalties if ALE:

• offers coverage to 70% of full-time employees
• 2016 and going forward

– 70% increased to 95%

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Part-time or variable hour employees?

• Fluctuating hours

– Reacting to monthly averages is impractical

• “Look back” method is optional way to deal

with problem of variable hour/seasonal employee

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Look back Method – Ongoing EEs

• “standard measurement period”

– 3 to 12 months

• “stability period”

– 6 to 12 months (equal to measurement period)

• “administrative period”

– Optional – up to 90 days, between end of standard measurement period and stability period

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Employer Mandate Penalties

• The “No Coverage” Penalty

– Opt out vs. mistake – Penalty based on entire full-time population – Originally triggered by a failure to offer to one full- time employee – Month by month – 1/12 of $2,000 – Modified by regulations

14

Employer Mandate Penalties

• The “Bad Coverage” Penalty

– Failure to offer MV/affordable coverage – Penalty limited to affected employee – Month by month – 1/12 of $3,000

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Assessment of Penalties

• IRS notice of assessment

– Post-calendar year

• Opportunity to defend

– Facts and circumstances – Large Employer status – De Minimis Relief – Safe Harbors

16

Timeline Cheat Sheet

• Separate handout
• Year by year steps to follow leading up to 2016

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Shared Responsibility Information Return

• Applies only to ALEs
• Annual filing to IRS, Annual Statement to Employees
• Content includes:

– Name, EIN – Certification that coverage offered to full-time employees and their dependents (by calendar month) – Months coverage was available – Lowest cost monthly self-only premium – Employer’s number of full-time employees for each month during the calendar year – The name, address, and TIN of each full-time employee – Months each full-time employee was covered

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Shared Responsibility Information Return, cont.

• Multiemployer Plan permitted to report information

for ALE with respect to participating employees

• Non-CBA employees?
• Certification for 2015 Transition Relief

19

W-2 REPORTING

• Optional for employers contributing to

multiemployer plans

• Non CBA employees – only for employers

required to file 250 or more W-2s in the year

20

FLSA NOTICES

• Every employer (not only Large Employers)

– Not a plan requirement

• Every employee (eligible or ineligible)
• Content

– describe exchanges/marketplaces – employer-provided coverage – Minimum Value – yes or no? – tax consequences of choosing exchange coverage over employer coverage

• (pre-tax v. post-tax)
• Timing

– existing employees: 10/1/13 – new employees: within 14 days of hire

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FLSA Notices

• No Penalties
• Multiemployer Relief

– Issue

• MEPs calculate minimum value, not employers

– Plans may assume employers’ obligation

• Relief only helpful for ongoing participants as of 10/1/13

– Plans likely incapable of timely notifying new employees within 14 days

• Lag in contribution reporting to plans – typically a 45 day

process

• Non CBA Employees

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QUESTIONS?

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Contact

Susanin, Widman & Brennan, P.C. 1285 Drummers Lane, Suite 202 Wayne, PA 19087 (610) 710-4510 www.swbcounsellors.com

Jack Widman, Esq., jwidman@swbcounsellors.com Mark Levengood, Esq., mlevengood@swbcounsellors.com Jennifer Abrams, Esq., jabrams@swbcounsellors.com

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