ACA and Prevailing Wage Contractors
Whether or not the Affordable Care Act (ACA) will remain in effect is still up to debate, but it is clear that for the near future, concerned individuals, employers and healthcare providers will have to comply with the law. As of now, it is still in the best interest of everyone to follow the law to avoid paying penalties.
Understanding the rules under ACA is important for companies with prevailing wage workers and hourly employees. Firstly, most workers report healthcare to be among the most important employee benefits. Expected increases in the penalties for non-compliance is another reason why it might be smarter for employers to simply find the best health insurance under the ACA.
Responsibilities under the Affordable Care Act
The Affordable Care Act broadly covers large employers, which are defined as those which employ at least 50 full-time equivalent employees on average. The number of full-time equivalent employees is equal to the aggregate number of hours of service of part-time employees divided by 120, plus the number of full-time employees that work 30 hours or more.
Large employers are obliged to offer affordable medical coverage to at least 95% of the company’s full-time employees and their dependent children age 26 or younger.
Penalties under the ACA
Failure to comply with the responsibilities provided in the ACA can merit either one of two penalties, which first took effect January 1 2016.
First, the employer who fails to offer the minimum essential coverage must pay a penalty of $2260 per full-time employee minus the first 30.
For employers who offer coverage that was unaffordable or did not provide minimum value, the penalty is $3390 per full-time employee who receives a premium tax credit.
In 2018, these penalties will increase. The first penalty will become $2320 per employee, while the second will become $3480.
ARCHER JORDAN Helps Ensure Your Compliance with Existing Laws
Ensuring exact compliance with the ACA is a mixture of knowledge of the law and correct record keeping and bookkeeping practices.
There are tracking requirements that would help employers identify which employees should be offered enrolment for coverage. The standards in defining “full-time” should also be consistent with the definitions outlined in the ACA.
ARCHER JORDAN can help you comply with the regulations under ACA and avoid the corresponding penalties. With years of experience in providing fringe benefits to government contractors and hourly hires, ARCHER JORDAN has the experience to strengthen your company. Contact us today!