Do You Know How PPACA Affects Employers With 50 Or More Full Time Equivalent Employees?

In a recent update released on the website, the Internal Revenue Service offered Affordable Care Act guidance for large employers with 50 or more full time equivalent employees. Since some of the provisions of ACA apply only to large employers, which are generally those with 50 or more equivalent employees working full-time, the goal of this guidance is to let large employers know about deadlines approaching and compliance requirements that need to be met. As a group benefits and insurance leader for companies across Southern California, Pontrelli, Timour & Associates, Inc. offers this synopsis of the main points covered by the IRS in the recent update.

Large Employers Under The Affordable Care Act

50 or more full time equivalent employees

50 or more full time equivalent employees

If you have 50 or more full-time equivalent employees, your company is considered as an applicable large employers or ALEs. Applicable large employers are subject to the employer shared responsibility provisions and the annual employer information return provisions. For example, in 2016 applicable large employers will have annual reporting responsibilities in relation to health insurance. These reporting responsibilities detail whether your company offers health insurance to your employees and what kind of health insurance was offered in 2015 to your full-time employees.

Regardless of size, all employers that provide self-insured health coverage must file an annual return reporting certain information for the employees and other individuals they cover. The first returns are due to be filed in 2016 for the year 2015. Such filings have now become an inherent part of business tax filings with the IRS.

100 Or More Full Time Equivalent Employees

Effective for calendar year 2015, applicable large employers with 100 or more full-time or full-time equivalent employees will be subject to the employer shared responsibility provision. The shared responsibility provision goes hand-in hand with the possibility of having to make a shared responsibility payment. Like a penalty, the shared responsibility payment applies to employers that do not offer adequate, affordable coverage to their full-time employees. As a result of not offering such coverage, if one or more of those employees get a premium tax credit, the shared responsibility payment will be triggered for ALEs with 100 or more full time equivalent employees.

50 Or More Full Time Equivalent Employees

As for the smaller ALEs with 50 or more full time equivalent employees, but less than 100, the employer shared responsibility provisions will be activated from 2015 to 2016. Given this change and potential penalties involved, calculating the number of employees becomes of paramount importance. Any employers that have close to 50 employees or whose workforce fluctuates throughout the year should consult with a benefits administration expert to figure out exactly what they need to stay in compliance.

Although the basic calculation seems simple, it can be particularly complex given the natural fluctuations of a large workforce on an annual basis. The IRS describes the calculation needed:

To determine its workforce size for a year an employer adds its total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each calendar month of the prior calendar year and divides that total number by 12.

The Challenge Of 50 Or More Full Time Equivalent Employees

Did you know that employers with more than 50 cannot purchase health insurance coverage for its employees through the Small Business Health Options Program? With the SHOP Marketplace off limits, it becomes even more for employers with 50 more full time equivalent employees to work with a groups benefits provider like Pontrelli, Timour & Associates, Inc. that can answer your questions, lower your costs and help your company stay in compliance. To learn more about how PT Benefits can help, please call us today at 626-795-4138 to speak with a member of our customer-centric team.

PT Benefits Addresses The Challenges Of Filing IRS Form 5500 Under ERISA Plans

Filing IRS Form 5500 under ERISA plans can be challenging. Pontrelli, Timour & Associates, Inc. needs to let our clients and potential clients know that ERISA (Employee Retirement Income Security Act) plans with 100 or more participants at the beginning of the plan year are required to file an IRS Form 5500. An ERISA financial audit may also be required. Smaller plans with less than 100 participants at the beginning of the plan year may be eligible to file IRS Form 5500-SF. Certain welfare benefit plans with less than 100 participants at the beginning of the plan year may be exempt from filing IRS Form 5500.

IRS Form 5500 Filing Challenges

irs form 5500

Importance of Filing IRS Form 5500

The IRS Form 5500 must be filled no later than 7 months (or up to 9 1/2 months with extensions) after the end of the plan year. As a result, the necessity for filing plans for 2014 is rapidly approaching. A two and one half month extension may be obtained by filing Form 5558 with the IRS. PT Benefits. Rather than filing such an extension, it is better to work with an experienced group benefits leader like PT Benefits to file such forms.

Did you know that the penalties can be up to $1,100 per day for failure or refusal to file an IRS Form 5500? If you discover that you have not filed all your Forms 5500, do not wait for the government to find you! Please take advantage of the Delinquent Filer Voluntary Compliance Program. PT Benefits can help. We are available to prepare your annual Form 5500 and Summary Annual Report.

Questions About IRS Form 5500

It is essential to know how to define a participant in such plans. The IRS Form 5500 instructions define “participant” for purposes of filing in a confusing manner, but PT Benefits can help. An individual becomes a participant covered under an employee welfare benefit plan when one of the following happens:

  1. The date designated by the plan as the date on which the individual begins participation in the plan;
  2. The date on which the individual becomes eligible under the plan for a benefit subject only to occurrence of the contingency for which the benefit is provided; or
  3. The date on which the individual makes a contribution to the plan, whether voluntary or mandatory.

PT Benefits understands how intimidating all of the bureaucracy of IRS filings and ERISA plans and PPACA can be for any company. What is essential is to stay in compliance and not make careless mistakes. As a group benefits leader and a qualified insurance broker, PT Benefits can help with IRS Form 5500. To learn more about ERISA filings, please call 626-795-4138 and speak to one of our brokers.

PT Benefits Explains Employer Shared Responsibility Reporting Requirements Under PPACA: Code Sections 6055 & 6056

PT Benefits wants our clients and potential clients to understand that there are two types of employer shared responsibility payments, also known as pay or play penalties, under the Affordable Care Act (ACA). The first penalty under Internal Revenue Code (Code) Section 4980H(a) is the penalty for failure to offer health coverage.  Effective for plan years that began on or after January 1, 2015, a $2,000 annual penalty applies to a large employer that fails to offer at least 70 percent of its full-time employees (FTEs) health coverage. Employer Shared Responsibility Reporting Requirements mean serious business.

Penalties & Employer Shared Responsibility Reporting Requirements

Employer Shared Responsibility Reporting Requirements, PPACA

Employer Shared Responsibility Reporting Requirements

The second penalty under §4980H(b) is for the failure to offer coverage that is of minimum value and affordable. The Section 4980H(b) penalty is a $3,000 annual penalty assessed on a monthly basis, and applies to each FTE who is not offered minimum value affordable coverage by the large employer, goes to the Marketplace Exchange and receives an exchange subsidy for insurance he or she purchases through the Marketplace Exchange.  It is important to note that even if an employer offers coverage to 70 percent of its FTEs for 2015 and 95 percent of its FTEs for 2016 and beyond, the employer could still be subject to penalties under Section 4980H(b) if the coverage is unaffordable or does not provide minimum value.

What is even more troubling when it comes to Employer Shared Responsibility Reporting Requirements is that even if an employer meets the 70/95 percent threshold, it still faces the potential for the $3,000 Section 4980H(b) penalty for every FTE who is not offered coverage (i.e., the 30/5 percent safe harbor employees) if that employee receives an exchange subsidy for insurance he/she purchases through the Marketplace Exchange.

Code Section 6055 requires health insurance issuers and employers that sponsor self-insured health plans to report information concerning the type and period of coverage to the IRS and to the covered individuals.  Section 6055 reporting is intended to serve as verification that the individual has MEC for purposes of enforcing the ACA’s individual responsibility requirements.  Code Section 6056 requires large employers to provide information to the Internal Revenue Service (IRS) about whether MEC is offered to their FTEs and their dependents. The IRS will determine whether an employer owes a shared responsibility payment under Code Section 4980H and whether an employee is eligible for a premium tax credit on a Marketplace Exchange will use this information.

Employer Shared Responsibility Reporting Requirements – 6055 & 6056

Employers with 50 or more FTEs use Forms 1094-C and 1095-C to report the information required under Code Sections 6055 and 6056.  Form 1094-C is used to report to the IRS summary information for the employer and to transmit the Forms 1095-C to the IRS.  Form 1095-C is used to report information about each applicable employee. If an employer provides coverage through an insured plan, part of Form 1095-C will be left blank.  The insurance company will separately report on MEC for those individuals enrolled in fully insured plan options.

Recognizing the burden of these Employer Shared Responsibility Reporting Requirements imposed on employers, the IRS has provided a simplified reporting method for large employers that make qualifying offers of coverage to FTEs, their spouse and their dependents for all 12 calendar months of the reporting year. A simplified alternative that allows the employer to report without identifying or specifying the number of FTEs is also available for employers that offered, for all 12 months of the calendar year, affordable health coverage under IRS safe harbors.

Help With Employer Shared Responsibility Reporting Requirements

PT Benefits believe that employers should review the draft reporting forms and instructions to familiarize themselves with the types of information that must be provided under these Employer Shared Responsibility Reporting Requirements.  If such forms and instructions are too complicated, PT Benefits will help our clients navigate this maze of PPACA bureaucracy. To learn more about how PT Benefits can help your company with Employer Shared Responsibility Reporting Requirements and whether your company qualifies for an IRS safe harbor, please call 626-795-4138 today.

Three Key Points For High Growth Companies To Consider About Employee Benefits Programs

As insurance brokers working with group benefit programs , Pontrelli, Timour & Associates understands the challenges facing high growth companies. If you are an owner or partner in a high growth company, you most likely experience change and the resulting business evolution on a regular basis. From expanding into new markets and developing your product lines and service offerings to finding the right talent and renovating office space, you have learned that to grow is to change. Without question, PPACA will present a new healthcare challenge for high growth companies in California.

ACA Challenges for High Growth Companies

high growth companies

High Growth Companies & ACA

Given the major changes in the past year with healthcare reform and the Affordable Care Act, the same evolution is true for a growing company’s  employee benefits strategy. Well before your company hits 50 full-time employees or equivalents, you need to be ready to act. The mandate was only delayed for one year.  Once you reach 50 employees, there are responsibilities that you will need to think through in order to help ensure the success of your company. With PT Benefits, you access insurance brokers that have both the skill set and expertise to work with your company as a growing firm.

As a full-service benefits program provider, we offer a host of services beyond just renewal numbers once a year. Given the complexities of the Affordable Care Act, we have become strategic advisors and business consultants for our clients. If you are a growing company and you are looking for an effective insurance broker, below are three key points you should take into consideration.

Three Key Points For High Growth Companies

Pontrelli, Timour & Associates recommends that you make sure you’re Employee Benefits Advisor can:

  1.  Provide Updates on ACA Compliance and Health Care Reform and Laws:  An advisor should provide consistent updates on regulations such as ERISA, HIPAA, FMLA as well as guidance on health care reform and Affordable Care Act Compliance.
  2. Develop an Employee Benefits Plan Built for the Future:  Are you planning to continue to grow and expand your business? If this is the case, do you have a plan in place? A Benefits Advisor should be able to help you develop a more strategic employee benefits plan that aims to achieve the goals of your organization in terms of growth and expansion.
  3. Help Establish an Employee Wellness Program: Consider implementing an employee wellness program to help reduce health care consumption at your organization.  A good wellness strategy can impact the bottom line by keeping your employees happy and working effectively. Nothing beats good health.

PT Benefits understands the growing pains of a successful company and it  can be stressful. By partnering with an experienced benefits advisor and insurance broker, you can both help ease some of that transitional pain while also being more prepared for the future growth of your firm. To learn more about how we can help smooth the growing pains for your successful business, please call PT Benefits at 626-795-4138.

Affordable Care Act Delays and Deadlines: A PT Benefits Guide To Recent PPACA Changes And Upcoming Healthcare Reform Benchmarks

affordable care act, obamacare, healthcare reform, ppaca, employer mandate

Affordable Care Act Guidelines

As the U.S. Labor Department, Department of Health and Human Services and the Treasury Department figure out Affordable Care Act guidelines and specify the deadlines for PPACA, PT Benefits offers a guide to recent changes and upcoming benchmarks related to the new healthcare reform laws and regulations. The goal is to help our clients and potential clients navigate the complex maze of healthcare reform and the Affordable Care Act. As a full service benefits agency, PT Benefits provides the guidance and the support needed to find success for your company when it come to benefits administration.

Recent PPACA Changes & Upcoming PPACA Benchmarks

One Major Affordable Care Act Delay —

1) The Employer Mandate

The mandate of the Employer Mandate of PPACA is that employers with 50 or more full-time workers or equivalents will have to pay a tax penalty of $2,000 to $3,000 per employee. The penalties will kick in if the employers fail to offer health insurance plans to their employees or if the plans they do offer do not meet ACA minimum standards. Delayed until 2015, to learn more, please check out this, check out this link to the Internal Revenue Service website.

Two Major Affordable Care Act  Deadlines —

1) Notification of Marketplace Coverage

If an employer is subject to the Fair Labor Standards Act, they are required to notify all their employees of the health care options available by October 1, 2013. At the time of hiring, each employee must be provided with a written notice. The written notice must inform the employee of the existence of the Marketplace, including a description of the services provided. Under the regulations of the Affordable Care Act, the employee must also be made aware of how to contact the Marketplace to request assistance.

In practice, this requirement affects the majority of employers. FLSA applies to employers with at least two employees and $500,000 in annual revenue or sales. What is intriguing is the requirements also applies to hospitals, nonprofits, schools and government agencies. Notices in the workplace must tell employees whether their employer-sponsored plan meets the minimum value standard.

In addition, within the parameters defined by PPACA, employees must be informed of whether or not the employer’s plan is considered affordable. Employees also need to know whether or not they can qualify for a premium tax credit if the insurance offered by the employee fails to meet these benchmarks. It is the employer’s responsibility to inform their employees across the board. With the Oct. 1, 2013 deadline already passed, to learn more, check out this link to the website of the U.S. Labor Department.

2) Employee Status

The delay of the employer mandate  of  the Affordable Care Act does not delay the necessity of employers to start collecting information needed to manage the potential penalty they will have to pay if they violate the Employer Mandate of 2015. If an employer wants to minimize their tax exposure, a 12-month period will have to be chosen to measure employee job status. Such a period can only be chosen if the proper records have been kept and the reporting requirements have been met. Without question, any employees determined to be working full time will need to be offered coverage in 2015. If they are not offered insurance, the employers will be liable for the penalty. With the deadline being in the fall of 2013, to learn more, check out this link to a PDF from the Internal Revenue Service website.

Since PT Benefits understands how intimidating and overwhelming healthcare reform and the Affordable Care Act can be for small to mid-sized business owners, we hope this guide has been helpful. As benefits administration experts, we provide the guidance our clients need to navigate through the maze of potential fines and trouble. To learn more about how we can help you, please call 866-782-9899 or fill out our handy contact form.