Prepare for 2015's play-or-pay penalties today: 3 places to start
January 16, 2014 12:31 PM
Overview
We dont need to remind this audience that the employer mandate was delayed, on July 2, 2013, to January 2015. Many of you were already in detailed discussions with your clients about play-or-pay and can pick back up on those right now. Marathas, who spent time working on the implementation of the Massachusetts health law, says affordability, full-time hours, employee status and nondiscrimination are the first things you should revisit with existing clients or begin discussing with new clients.
1. Affordability
If they havent already done so, they need to determine whether their plans will be affordable in 2015. The starts and stops in this law have led many to drop the ball. Many have been slow to pick it up again. Now is the time to do so, Marathas says.
2. Full-time hours
In Massachusetts, Marathas says, penalties are assessed because employers cant prove theyre compliant. He adds: Employers should be working with payroll and HRIS vendors now to create systems that will flag hours employees work and maintain them in a form that will be suitable for use to prove to the government. Back in Massachusetts, he says all penalties were around this full-time status issue. This year should be spent upgrading systems to capture employee hours fully.
3. Employee status
"Employers who use a substantial number of independent contractors, freelancers and similar classified individuals are at some risk of being assessed the penalty of $2,000 per employee for not providing health coverage. Because the IRS may disagree that the independent contractors and others are not employees and may deem them employees. If the group of reclassified individuals exceeds 5% of the workforce, the employer will fail the test and be assessed the penalty, Marathas says, adding that employers with this type of workforce need to hire legal counsel to ensure they are in compliance before 2015 hits.
