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Health Care Reform 2013: What will it mean for your Middle Tennessee Company?

If we’ve learned anything from health care reform, it’s that patience is a virtue.

Since the Patient Protection and Affordable Care Act was passed back in March 2010, Middle Tennessee employers have waited – and waited – through numerous court challenges and a nail-biting presidential election to see what form the law would finally take.

Now that the dust has settled, companies are gearing up for a slew of health care changes throughout this year and next.  Here’s a quick overview of what’s ahead:

In 2013

  • If your company has fewer than 50 full-time employees (as calculated in accordance with PPACA guidelines), you are exempt from having to provide health insurance.
  • Starting this month, employee contributions to health care spending accounts must be capped at $2,500.
  • Also starting this month, the deduction for the portion of health care expenses reimbursed to you through the Medicare Part D subsidy program is no longer available.  The Retiree Drug Subsidy remains in existence, but you are no longer able to deduct the amount of the subsidy – effectively increasing your cost of providing prescription drug coverage to retirees.
  • In March, you must notify employees about the status of Tennessee’s health care exchange, as well as their eligibility for federal subsidies if your health care plan is deemed unaffordable under the new law.
  • Tax form W-2s issued in January 2013 for wages paid in 2012 must, for the first time, include a line showing the benefit your employees receive from your employer-sponsored heath care plan.  This provision is an attempt to make health care benefits and spending more transparent – and may increase your W-2 preparation costs.

Changes for 2014

  • If you have more than 50 full-time employees, you must offer an affordable health care plan or face penalties of up to $2,000 per employee, excluding the first 30 workers.
  • Beginning in 2014, health insurance will be available to both individuals and small businesses through state-run Small business Health Options Program (SHOP) exchanges.  If you have a small company (up to 100 employees), this will allow you to offer health insurance to employees at rates similar to those available to large corporations.
  • Large employers must offer health coverage that is deemed affordable and that meets the minimum value standards – or face a penalty if just one of its full-time employees receives federal assistance to purchase insurance through an exchange.
  • The health plans large employers offer must have a minimum actuarial value of 60 percent.

Small employers, as well as those with a large number of hourly workers, will be hit hardest by these reforms.  Between now and year’s end, these businesses must run cost analyses to determine whether it makes more sense to offer health insurance or to pay the penalties.

Regulations permitting, Wood Personnel can help your Middle Tennessee company use staffing to cost-effectively manage the ramifications of the PPACA.  If your organization’s headcount hovers around the cutoff, you can reduce your directly employed full-time staff to a level below 50 and use our contingent staff or contract employees to handle the additional workload.  Want to learn more?  Give Wood Personnel a call.