Large Businesses and the Affordable Care Act

Health Care Reform LargeThe Affordable Care Act was enacted on March 23, 2010.  It contains some tax provisions that are in effect and more that will be implemented during the next several years.

What is considered a large business?

You are generally considered a large business if you have more than 50 employees.

Do I have to provide health insurance to my employees?

The law does not require employers to provide health insurance.  Starting in 2014, large businesses (those with 50 or more full-time workers) that do not provide adequate health insurance will be required to pay an assessment if their employees receive premium tax credits to buy their own insurance.  These assessments will offset part of the cost of these tax credits.  The assessment for a large employer that does not offer coverage will be $2,000 per full-time employee beyond the company’s first 30 workers.

 Do I have to report the cost of insurance on my employees’ W-2 forms?

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD.  Many employers are eligible for transition relief for tax-year 2012 and beyond, until the IRS issues final guidance for this reporting requirement.  The amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee’s income, and it is not taxable.  This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers.

Here are two great resources for more information:

The Health Care Law and You

Affordable Care Act Tax Provisions

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

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