affordable care act

New Law Provides a Variety of Tax Breaks to Businesses and Employers

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While you were celebrating the holidays, you may not have noticed that Congress passed a law with a grab bag of provisions that provide tax relief to businesses and employers. The “Further Consolidated Appropriations Act, 2020” was signed into law on December 20, 2019. It makes many changes to the tax code, including an extension (generally through 2020) of more than 30 provisions that were set to expire or already expired.

Two other laws were passed as part of the law (The Taxpayer Certainty and Disaster Tax Relief Act of 2019 and the Setting Every Community Up for Retirement Enhancement Act).

Here are five highlights.

Long-term part-timers can participate in 401(k)s.

Under current law, employers generally can exclude part-time employees (those who work less than 1,000 hours per year) when providing a 401(k) plan to their employees. A qualified retirement plan can generally delay participation in the plan based on an employee attaining […]

By |January 29th, 2020|401k, affordable care act, business, tax, tax credit|0 Comments

Do You Know the ABCs of HSAs, FSAs and HRAs?

There continues to be much uncertainty about the Affordable Care Act and how such uncertainty will impact health care costs. So it’s critical to leverage all tax-advantaged ways to fund these expenses, including HSAs, FSAs and HRAs. Here’s how to make sense of this alphabet soup of health care accounts.

HSAs

If you’re covered by a qualified high-deductible health plan (HDHP), you can contribute pretax income to an employer-sponsored Health Savings Account — or make deductible contributions to an HSA you set up yourself — up to $3,450 for self-only coverage and $6,900 for family coverage for 2018. Plus, if you’re age 55 or older, you may contribute an additional $1,000.

You own the account, which can bear interest or be invested, growing tax-deferred similar to an IRA. Withdrawals for qualified medical expenses are tax-free, and you can carry over a balance from year to year.

FSAs

Regardless of […]

By |June 26th, 2018|affordable care act, Health care, hsa|0 Comments

House Republicans Pass Amended AHCA

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On May 4, 2017, members of the U.S. House of Representatives voted along party lines to pass an amended version of the American Health Care Act – proposed legislation to repeal and replace the ACA. The AHCA will now move on to be considered by the Senate. This ACA Compliance Bulletin provides an overview of the proposed legislation and its potential impact going forward.

The AHCA needed 216 votes to pass in the House. Ultimately, it passed on a party-line vote, with 217 Republicans and no Democrats voting in favor of the legislation. The AHCA will only need a simple majority vote in the Senate to pass. If it passes both the House and the Senate, the AHCA would then go to President Donald Trump to be signed into law.

The attached bulletin provides helpful information on how this may affect employers and individuals. We will keep you updated on any new developments and in the meantime, feel free to reach out to your Linkenheimer CPA with any questions.

Download the ACA Compliance Bulletin Now

By |May 9th, 2017|affordable care act, Health care|0 Comments

More Info on ACA Repeal and Replacement

House Republicans have unveiled a repeal and replacement plan for the Affordable Care Act (ACA). The GOP’s American Health Care Act (ACHA) would eliminate most of the ACA’s taxes, including penalties connected with individual and employer mandates, the net investment income (NII) tax and the Additional Medicare tax. Left in place, although delayed, would be the excise tax on high dollar health plans. Also left in place, would be a number of non-tax provisions related to scope of coverage, benefits and children- including allowing dependents to continue to stay on their parents’ plan until the age of 26, prohibiting health insurers from denying coverage or raising rates to patients based on pre-existing conditions, and forbidding life-time limits on insurance coverage.

The House GOP plan has been rejected by Democrats. Some Republicans have said the plan does not go far enough in repealing all of the ACA. As March moves forward, a vote on the house floor is eventually expected.

To read the impact of the ACA changes, new age-based credits, repeal of NII tax, expanded HSA and other topics, click the link for a detailed read from CCH and Wolters Kluwer. CCH Tax Briefing – ACA Repeal […]

By |March 14th, 2017|affordable care act, Health care|0 Comments

Keep an Eye on the ACA Rules and Potential Changes

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Are your employees enrolled in a health care plan? Here’s something to consider in your planning: Late in 2015, Congress delayed implementation of a significant tax on high-cost employer-sponsored insurance plans — called the “Cadillac tax” — from 2018 to 2020. Under this rule, when the value of a health plan is more than $10,200 for individual coverage and $27,500 for family coverage, the plans face a 40% tax on the excess amount, but businesses now won’t have to face that concern for a couple more years. Even with this delay, it’s worthwhile keeping this potential tax on your radar screen.

Also, if your company was not subject to the Affordable Care Act for 2015, be aware that the thresholds changed dramatically for 2016. An organization becomes an Applicable Large Employer (ALE) when it employs an average of 50 or more full-time and full-time-equivalent employees on business days during the calendar year. ALEs must provide certain employees with health insurance that meets specific standards, or face significant penalties.  If you have any questions, please contact your Linkenheimer CPA.

By |December 7th, 2016|affordable care act|0 Comments

IRS Reminds Employers of Approaching ACA Information Reporting Due Dates:

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The IRS is encouraging self-insuring employers and Applicable Large Employers (ALEs) to mark their calendars to ensure they meet the new ACA reporting requirements. Self-insuring employers that are not ALEs must provide Form 1095-B (Health Coverage) and ALEs must provide Form 1095-C (Employer-provided Health Insurance Offer and Coverage) to employees by 3/31/16. These forms, plus their related transmittal forms, must be filed with the IRS by 5/31/16, if filing on paper, or 6/30/16, if filing electronically.

If you have any question, please contact your Linkenheimer CPA at 707-546-0272.

By |March 8th, 2016|affordable care act|0 Comments

Changes to Small Business Health Care Tax Credit

Small employers should be aware of changes to the small business health care tax credit, a provision in the Affordable Care Act that gives a tax credit to eligible small employers who provide health care to their employees.

Beginning in 2014, there are changes to the tax credit that may affect your small business or tax-exempt organization:

  • Credit percentage increased from 35 percent to 50 percent of employer-paid premiums; for tax-exempt employers, the percentage increased from 25 percent to 35 percent.
  • Small employers may claim the credit for only two consecutive taxable years beginning in tax year 2014 and beyond.
  • For 2014, the credit is phased out beginning when average wages equal $25,400 and is fully phased out when average wages exceed $50,800. The average wage phase out is adjusted annually for inflation.
  • Generally, small employers are required to purchase a Qualified Health Plan from a Small Business Health Options Program Marketplace to be eligible to claim the credit.  Transition relief from this requirement is available to certain small employers.

Small employers may still be eligible to claim the tax credit for tax years 2010 through 2013.   Employers who were eligible to […]

By |February 26th, 2015|affordable care act|0 Comments

Impacts of the Affordable Care Act on Employer/ Business Owner

Beginning in 2015, if you employ at least 100 full-time employees or full-time equivalents (and after 2015, at least 50 full-time employees or equivalents), you may become subject to the employer mandate that was enacted as part of the Affordable Care Act (ACA), and if you fail to meet its requirements, you may owe a nondeductible excise tax.

You could potentially be subject to the excise tax, if any of your full-time employees are certified, as described below, as having received “health care assistance,” and you either: (1) do not offer health care coverage for all of your full-time employees; or (2) offer “minimum essential” coverage under your group health care plan that either is not “affordable,” or does not provide “minimum value” to your employees.

If you do not offer health care coverage to your full-time employees, the excise tax will be $166.67 for any month, i.e., 1/12 of $2,000 for 2015, times the number of your full-time employees during any month, reduced by a 80-person threshold (30 in 2016).

If you do offer health care coverage to your employees, but it is not affordable or does not provide minimum value, the excise tax will be […]

By |February 10th, 2015|affordable care act|1 Comment

The Personal Impact of the Affordable Care Act

Open enrollment for 2015 for Covered California closes on February 15th.

Open enrollment is the one-time during the year when most Californians who need insurance cannot be denied by a health plan and when millions can get subsidized health insurance for the upcoming year.

All individuals not covered by an employer sponsored health plan, Medicaid, Medicare, other public insurance program (such as Tricare), or meeting an exemption from coverage must acquire an approved private-insurance policy or pay a shared responsibility payment. If you do not have coverage or meet one of the exemptions, you will pay this payment. The fine for 2015 is either a) 2 percent of your total income or b) fines for each member of your household ($325/adult, $162.50/child, or $975/total household), whichever is greater.

Individuals who have limited income may enroll in Medi-Cal at any time.

Health care impacts 2014 income tax returns

Most people already have qualifying health care coverage and will only need to check a box to indicate that they satisfy the individual shared responsibility provision when they file their tax returns in early 2015.

However, an important Affordable Care Act tax provision for individuals and families is the premium tax credit. Further, […]

By |February 10th, 2015|affordable care act|1 Comment

Obama Administration Postpones Large Employer Health Care Mandate Until 2015

The requirement that businesses provide their workers with health insurance or face fines – a key provision contained in President Obama’s sweeping health care law – will be delayed by one year, the Treasury Department said Tuesday.

The postponement came after business owners expressed concerns about the complexity of the law’s reporting requirements and some viewed it to be a potential job killer in an already struggling economy. Under the Affordable Care Act, businesses employing 50 or more full-time workers that don’t provide them health insurance will be penalized. The extra year before the requirements go into effect will allow the government more time to assess ways to simplify the reporting process for businesses.

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