Understanding the Affordable Care Act as a Construction Company and Employee

Five years ago, when the President signed the Patient Protection and Affordable Act (PPACA) into law, it changed the face of healthcare. Individuals and companies will be affected differently depending on which side of the coin you are on.

Effective January 1, 2014, the PPACA required that U.S. Citizens and foreign nationals residing in the country must legally secure health insurance. Any person that is required to file a tax return must provide proof that each household member had health insurance coverage by month.

Three forms that an individual may receive this year as proof of insurance are:

• IRS Form 1095-A will be issued to individuals who procured insurance through Healthcare.gov or a state marketplace.

• IRS Form 1095-B will be issued by insurance carriers or large employers who self-insure to individuals who are covered under employer-sponsored policies issued by the carrier or large employer.

• IRS Form 1095-C will be issued by large employers who sponsor health insurance policies to all employees covered under the policy.

Insurance exchanges will be issuing Form 1095-A and individuals should expect to see them in the next few weeks. However, health insurance carriers and employers are not required to issue Forms 1095-B and 1095-C until the following year for the 2015 tax year.

If your employees did not have coverage during the year, there will be a minimum $95 penalty assessed with a maximum of $285 per family. These penalties are expected to increase in 2015 and beyond.

Companies with less than 50 full-time employees are not required to provide health insurance or issue reports on their employee’s coverage. If your company self-insures, then you may be subject to reporting requirements that are designed for large employers.

Your company may receive an advantageous tax credit if you have less than 25-full-time-equivalent (FTE) employees and you paid at least 50% of the employee’s healthcare insurance premiums. The company must also have purchased health coverage through a Small Business Health Options Program (SHOP) exchange.

If your company consists of 50 or more full-time employees, you must provide qualified health insurance at rates that are affordable for each employee. Reporting requirements related to IRS Codes 6055 and 6056 will be applicable to large employers in 2016, for the 2015 tax year.

No matter your company’s size, being aware of how the PPACA effects you and your employees is important. Having the ability to field questions and direct employees to the appropriate resource can help everyone navigate the changing face of healthcare.