February 11, 2014

Marcum Healthcare Reform Expert Responds to New Delay in Large Employer Mandate Under Affordable Care Act

Marcum Healthcare Reform Expert Responds to New Delay in Large Employer Mandate Under Affordable Care Act

New York City, NYMichael F. D’Addio, a Principal in the New Haven, Connecticut office of Marcum LLP and co-manager of the Firm’s national Healthcare Reform Task Force, responded to new rules announced yesterday delaying, for the second time, the implementation of mandated large employer health plans under the Patient Protection and Affordable Care Act. The delay gives large employers more time to prepare and postpones potentially steep penalties for failing to comply with the Act’s provisions. Marcum is a top national accounting and advisory firm.

“The delay in the penalties comes at a significant cost to the government,” Mr. D’Addio said. “The Congressional Budget Office had originally expected to collect about $4 billion dollars in penalties for 2014. Under the new rules, the government will not collect many of these dollars for two years.”

Under the delayed implementation schedule:

  • Companies with between 50 and 99 employees will be able to avoid the penalty for failure to cover full-time employees until 2016. These businesses, which meet the definition of a “large employer” under the law, will have to certify to the government that they did not fire employees to slip under the 100-person threshold in order to qualify for this extension. They must also certify that they will not drop health plans which they already offer to employees.
  • Companies with 100 or more employees will have to provide health insurance coverage in 2015. However, even these employers receive a benefit under this announcement. They can avoid the large employer penalty by offering coverage to 70% of their full-time employees in 2015 and to 95% in 2016. Prior to this change, these employers were required to offer coverage to at least 95% of full-time employees in 2015 to avoid the penalty.

“The delay in the penalty rule does not avoid the need for testing for the 2015 year,” said Mr. D’Addio, a compliance expert. “However, even though there may be delayed application for what I call medium-sized large employers and larger large employers, employers still need to do testing for 2014 to determine which group they fall into in 2015, or whether they fall out of the large employer category by having fewer than 50 full-time equivalent employees.”

The Obama administration also announced clarifications as to the status of certain service providers as employees. “Organizations with a large number of volunteer employees will not be required to provide coverage for these individuals. Additionally, seasonal employees who work six months or less in a year will not have to be counted as employees. Special rules were also discussed dealing with the treatment of teachers and adjunct professors,” Mr. D’Addio said.

Marcum’s Healthcare Reform Task Force assists clients with the compliance requirements of the Patient Protection & Affordable Care Act (PPACA). The task force includes experts from Marcum LLP and Marcum Financial Services. In addition to consulting and testing services, the task force offers seminars, webinars, roundtables and newsletters to help clients understand the provisions of the Affordable Care Act and stay up to date as specific components of the Act are amended.

About Marcum LLP
Marcum LLP is a top-ranked national accounting and advisory firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum’s industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. The Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum.

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