Affordable Care Act is initiating new debates and questions as the healthcare reform are coming to full swing. One of these debate is "How Obamacare Will Impact Companies?" and a consequent question that "Will Employer Paid Health Benefits be taxable in 2015 or 2016?"

Obamacare is sure to have an enormous impact on how companies and business employers offer insurance coverage to their employees. Under the new act, employers will be required to provide health care coverage if their employees exceed the minimum set value of 50.

Will Employer Paid Health Benefits Taxable in 2015/ 2016?

Employer paid benefit changes have been a major outcry from both houses of representatives as well as from the employers who feel they are being burdened on the current economic situation of the country.

The government will roll out these changes in employer mandate gradually in coming years. But this delay will not affect the other segments of the Affordable Care Act which have been in operation.

Employer Paid Health Benefits Taxable in 2015/2016?

Leaving the Cadillac plan, currently there is no law on the books, making employer paid health insurance benefits taxable in 2014. But there are many experts who believe that United Sates government will tax employer provided health benefit as some point.

The Cadillac Tax on employers is indeed scheduled for 2018. Other than that, there are two taxes/fees that are starting from 2014. First is the tax on insurance premiums charged by insurance companies that will eventually pass on to employees. Second is $63 fee per insured employee, including insured under self insured administrative arrangements.

There is an additional tax to be included that is referred to as Cadillac plans tax. Which means starting from 2018, high cost health insurance plans will be subject to a 40% excise tax. High cost health plans are defined as above 10,200 for single coverage and 27,500 for family coverage.

When will the provision take effect?

The outcry from the employers community seem to have caught the attention of the Obama administration, as there has been a suspension of their mandate till January, 1 2015.

Employers are expected to use the 1 year break to determine whether they have enough staff base that requires mandatory coverage. The current act requires employers to offer mandatory health care insurance cover if they have more than 50 employees under their belt. The process for identifying potential fines for employers who violate the act will be reviewed and assessed in 2016.

Obamacare Affects Employers and Businesses

Beginning January 2015, employers will be required to offer either minimum essential coverage to their employees and failure to do so they will be subject to a penalty from the government. Failure to offer minimum coverage to full time employees who earn salaries in the range of 100-400% above the federal government poverty line, will result in a fine of $2000 per full time employee.

The other catch of the act lies on the fact that employers who offer minimum essential coverage to their employees and dependents but deemed to be unaffordable or not in the minimum bracket range will be subject to a lesser penalty of $3000. A full time employee under the new act is a person who works 30 hours or more per week or 130 hours per month.

Employers will be required to check the status of their employees by looking back at a standard measurement period of not less than three months of consecutive period of employment. Employers will thus be required under this case to offer coverage to the full time employees and their dependents for a corresponding 6-12 month stability period.

The new act will mostly affect businesses depending on the number of full time employees employed, whether the business offers minimum essential coverage or whether one of the employees qualifies for a subsidized form of coverage from the government.

Part-time Employees

Under the new act, part time employees working hours can also be converted into FTE for the purpose of determining if they are eligible for coverage by the employer. Conversion in this case will be done by adding monthly hours worked and dividing the total by 120. Employers will not be required to offer coverage to part time employees but hours worked by the employees will be used to determine if they are eligible for coverage

The new act requiring employers to offer health care coverage to their employees will take a break in 2014 but will be in full operation as of January 2015, subject to penalties in 2016

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