September 5, 2012
www.gfb.org
Vol. 30 No. 36
FARM EMPLOYERS GEARING FOR AFFORDABLE CARE ACT With key employers’ provisions of the Patient Protection and Affordable Care Act (ACA) set to take effect beginning in 2014, many employers, including those in farming, are seeking information on what steps will be required for compliance. Under the ACA, employers who have 50 or morefull-time employees (those who work an average of 30 hours or more per week) will be required to provide affordable minimum essential health insurance coverage to those full-time employees. Full-time equivalents are determined by taking the total number of hours worked in a month by each non-full time employee and dividing that number by 120 (30 hours times four weeks). Seasonal workers who are employed for 120 days or less during the calendar year are not currently included in the employee calculation. The ACA defines affordable coverage as coverage for which the employee’s portion of the premium for employee-only coverage does not exceed 9.5 percent of the employee’s W-2 earnings. Employers will be allowed to delay covering employees for 60 days without penalty, or delay coverage for 60 to 90 days and pay a $600 penalty. Beginning in 2014, employers with more than 200 employees must automatically enroll employees into health insurance plans offered by the employer. Employees may opt out. A penalty is to be imposed when an employee of an employer with 50 or more full time employees/equivalents receives a premium tax credit. A premium tax credit is a tax credit for eligible individuals and families with incomes between 100-400 percent of the federal poverty level, used to purchase insurance through the Exchanges. Since 2010, tax credits have been available to small employers that purchase health insurance for employees if they have no more than 25 employees and pay average annual wages of less than $50,000. The credit is available to small employers that pay at least half the cost of single coverage for their employees. The maximum credit of 35 percent of premiums paid is available to employers who have 10 or fewer full-time equivalent employees and pay an average annual wage of $25,000 or less. This tax credit increases to 50 percent for 2014 and 2015. For more information about the health care law, visit http://healthreform.kff.org/ or http://www.healthcare.gov/index.html. For advice on strategies to comply with ACA, consult with an accountant or attorney.