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The Affordable Care Act

This month, as 2014 comes to a close, we are taking a look back at some of the most important blog topics we have covered both in case you missed them, and to help you prepare for 2015!

The Internal Revenue Service has recently released the maximum fine amounts for those persons who forego health care coverage.The-Health-Care-Reform-and-Medicare-resized-600.jpg

Individuals earning below the tax filing threshold of $10,150 will not pay a penalty. Others earning above $10,150 will pay based on earnings over the tax threshold of $10,150.

For taxes filed for the year 2014:

  • Individuals earning between $10,150 and $19650, there is a flat penalty fee of $95 per adult (47.50 per child under 18). Thus, a single adult making $19,000 would pay $95 (1×95); a family of two adults at $19,000 would pay $190 (2×95); and a family of one adult and one child at $19,000 would pay $142.50 (95+47.50). The maximum penalty per family with a household income below $19,650 is $285.
  • Individuals earning above $19,650, will be required to pay a penalty equal to 1% of their annual income. For example, a single adult employee earning $40,000 per year would be required to pay $400 (40,000×1%). Whereas, a family of six with two adults each making $50,000, the total income would be $100,000. Therefore the family would pay $1,000 (100,000×1%).

The maximum penalty for 2014 is $2,448 per individual annually, which is 1% of a yearly income of $244.800. Earnings above that for individuals are capped at the individual maximum penalty.

The maximum family penalty issued by the IRS was $12,240 for a five-member family, and will only impact households with a combined yearly income of $1.2 million or more.

*Remember these penalty rates are only for the year 2014, and will increase in 2015 and beyond. The 2015 penalties will be the greater of $325 per person or 2% of total income. 2016 Rates will rise further to the greater of $695 per person or 2.5% of total income. The years following 2016, the penalty rates will be adjusted according to inflation.

Call HR Strategies today for assistance! 770-339-0000 or visit our website at www.hr-strategies.com.

Refusing Health Care Coverage? Be Prepared to Pay

The Internal Revenue Service has recently released the maximum fine amounts for those persons who forego health care coverage.The-Health-Care-Reform-and-Medicare-resized-600.jpg

Individuals earning below the tax filing threshold of $10,150 will not pay a penalty. Others earning above $10,150 will pay based on earnings over the tax threshold of $10,150.

For taxes filed for the year 2014:

  • Individuals earning between $10,150 and $19650, there is a flat penalty fee of $95 per adult (47.50 per child under 18). Thus, a single adult making $19,000 would pay $95 (1×95); a family of two adults at $19,000 would pay $190 (2×95); and a family of one adult and one child at $19,000 would pay $142.50 (95+47.50). The maximum penalty per family with a household income below $19,650 is $285.
  • Individuals earning above $19,650, will be required to pay a penalty equal to 1% of their annual income. For example, a single adult employee earning $40,000 per year would be required to pay $400 (40,000×1%). Whereas, a family of six with two adults each making $50,000, the total income would be $100,000. Therefore the family would pay $1,000 (100,000×1%).

The maximum penalty for 2014 is $2,448 per individual annually, which is 1% of a yearly income of $244.800. Earnings above that for individuals are capped at the individual maximum penalty.

The maximum family penalty issued by the IRS was $12,240 for a five-member family, and will only impact households with a combined yearly income of $1.2 million or more.

*Remember these penalty rates are only for the year 2014, and will increase in 2015 and beyond. The 2015 penalties will be the greater of $325 per person or 2% of total income. 2016 Rates will rise further to the greater of $695 per person or 2.5% of total income. The years following 2016, the penalty rates will be adjusted according to inflation.

Call HR Strategies today for assistance! 770-339-0000 or visit our website at www.hr-strategies.com.

Independence Day is Coming Up!

Independence has been a goal of Americans since the founding of our country, and those with their own companies tend to be particularly independent. Some people start their own business believing that it is the only route to “life, liberty, and the pursuit of happiness”; only to later realize the headaches that can come along with owning and managing a business. While they began their business to gain independence, they lose the freedom that they dream of. They become saddled with letting their business’ rule their lives, depriving them of time with family and friends, and even at times their health.

american flag drawing

It is time as business owners to create your own Declaration of Independence!

  • Independence from rising administrative costs. Outsourcing your HR administration relieves business owners from the complex HR matters of benefits, workers’ compensation claims, payroll, tax administration, regulatory compliance, etc., and by doing so reduces your overhead.
  • Independence from focusing on the mundane. Outsourcing your HR enables small business owners to focus on their core competencies, rather than focusing on running payroll, providing employee benefits, or the many other facets of human resource administration. Outsourcing allows business owners to concentrate on their passion, without being distracted by countless human resources responsibilities.
  • Independence from the worry of regulatory compliance. Outsourcing your HR administration can keep business owners compliant by working as their off-site HR department, with the back-up of legal counsel partners, firms specializing in workplace law. Outsourcing can help you reduce your risk and vulnerabilities to Federal, State, Local and Professional Regulatory changes.
  • Independence from the nightmare of Workers Compensation Insurance and Risk Management. Outsourcing can help improve the work environment and make it safer by focusing on workplace risk management, safety programs, and good human resource practices. Additionally, when you outsource with a PEO, such as HR Strategies, they can arrange workers’ compensation coverage with major insurance carriers, provide their clients with training on safety and government compliance in regards to workers compensation and risk management, and manage the complexity of claims.
  • Independence from the burden of human resource administration and paperwork. When you outsource your HR needs to a PEO you receive assistance with all of the complications and paperwork that go along with the employee lifecycle:  writing help wanted ads and job descriptions; drug screening and verifications; new hire candidate assessment tools; new hire paperwork, including I-9 compliance; customized employee handbooks; employee policies and procedures; Federal and State required postings; human resource, supervisor, and compliance training; EEOC claims; Employment Practices Liability Insurance; Employee Assistance Program; compliance with IRS, INS, ADA, EEOC, FMLA, FLSA, DOT, COBRA, Title VII, etc.; discipline and termination counseling; investigation of employee/employer and employment complaints.

 Declare Your Independence today by calling HR Strategies at 770-339-0000!

Voluntary Benefits Open Enrollment: What is it? What do I need to know in regards to PPACA?

health care reformOpen Enrollment is the period of time when worksite employees and client companies can make changes to their elected voluntary benefits; these include Flexible Spending Accounts, Disability Insurance, and Life Insurance. While the PPACA has changed health/medical insurance, in ways that many are still trying to figure out, most companies and individuals are just now beginning to realize that the new health care law will have an impact on voluntary benefits as well.

Flexible Spending Accounts offer employees a way to save on payroll taxes by setting aside a portion of their earnings through a cafeteria plan into an account for qualified medical expenses.  According to a recent article by NAPEO, “The new guidance (on PPACA) make clear that a health FSA that does not qualify as “excepted benefits” is subject to the PPACA market reforms, including the prohibition on essential health benefits and the preventive care rules. However, the new guidance provides that a health FSA that provides only excepted benefits is not subject to the PPACA market reforms.” So what does this mean for PEO/HRO/ASO clients and worksite employees? And what are excepted benefits? To be an excepted benefit, a health FSA must satisfy two conditions: The maximum benefit payable to any participant for the year cannot exceed two times the salary reduction election under the health FSA for the year (or, if greater, the amount of the employee’s salary reduction for the health FSA for the year, plus $500); and other non-excepted group health coverage (e.g., major medical) must be made available for the year to the participants by reason of their employment.(Troutman Sanders, LLP) If your company is outsourcing their employee benefits, it is imperative that you review what is being offered, and know whether or not your FSA is an excepted benefit. If your FSA does not qualify as an excepted benefit, you could be in for some penalties under PPACA.

On the other hand, Health Savings Accounts are a type of savings account offered to those participating in high-deductible major-medical plans. The latest guidance, mentioned in relation to FSA’s, does not address HSA’s. This does not mean that HSA’s are not in play when it comes to PPACA, as the IRS has stated that the preventative health services can be paid for by a high-deductible plan without the deductible being applied. This is good news for those participating in high-deductible plans. Additionally, “some employers are pushing employees to high-deductible plans combined with health savings accounts. That approach is designed to give employees more of a financial stake when getting health care.”

As PPACA continues to shape the way benefits, not only major-medical but also voluntary, are handled and approached, HR Strategies clients and worksite employees can rest assured that we are staying ahead of the curve, and will continue to update them on how the new guidance’s and regulations affect them.

  1. Carrie Teegardin, Atlanta Journal-Constitution
  2. http://www.napeo.org/insider/currentissue/nov13/healthcare.cfm
  3. Troutman Sanders, LLP
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