Potential $100/day Obamacare Penalty for Small Businesses - Oct 1

[JohnH]

I don't recall seeing this posted on this forum, so just thought I'd ask. The article says that any business grossing over $500K must send out a notification by Oct 1, even if the only have one employee.

Has anyone run across this anywhere else?

http://smallbusiness.foxbusiness.com/legal-hr/2013/09/06/new-obamacare-penalty-that-biz-may-not-know-about/

[JohnH]

...and Here is a Sample Letter

http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

This is a slightly hasty post. Haven't checked out the letter thoroughly, but it does have an OMB designation so appears to be legitimate.

[Super Mom]

I don't recall seeing this posted on this forum, so just thought I'd ask. The article says that any business grossing over $500K must send out a notification by Oct 1, even if the only have one employee.

Has anyone run across this anywhere else?

http://smallbusiness.foxbusiness.com...ot-know-about/

Oh MY! I am interested in this too, I thought my small businesses were ok for now on obamacare because of not enough full time employees, but this would DEFINITELY affect them!

[JohnH]

When I first saw this article, I speculated that it might be an overreaction. So I decided to post it here just to learn if anyone else has a different perspective or some additional info. My concern is that it could be one of those "gotcha" penalties that can be selectively enforced - similar in many ways to the more arcane aspects of the I-9 rules.

[ATSMAN]

Not a Big Issue!

Most businesses that have any employees and have workmens comp etc. will have a bulletin board or some place where they will post information that are mandated by local labor laws. All they have to do is post the notice there. I don't think it requires that the employees be mailed a copy??

And if you have a handful of employees, you could do a payroll stuffer.

[S T]

As I hold a Insurance License, my broker services that I use, has sent out an email, with "model letters" to use - as so many Businesses are not aware that an "Exchange Notice to Employes Due by October 1, 2013. The Broker Service is advising to send out "all" with and without medical insurance

Here are some excerpts from that notice

Exchange Notice to Employees Due by October 1, 2013

The Affordable Care Act (ACA) requires all employers subject to the Fair Labor Standards Act (FLSA)* to provide notices to all current employees and new hires regarding the new Health Insurance Marketplace (in CA, Covered California) and the subsidies available to qualified individuals. The notices to current employees must be provided no later than October 1, 2013

• All current employees must receive these notices - full-time, part-time, and seasonal - whether or not they are eligible for or currently enrolled on the employer-sponsored plan.
• Current COBRA beneficiaries also should receive a notice by 10/1/2013. DOL has provided a new COBRA Model Election Notice
• Both union and non-union employees must receive notices. The employer should contact the union representative to coordinate delivery of notices to union employees.
• Notices may be distributed in a number of acceptable ways that ensure each current employee and COBRA beneficiary receives one: hand-delivery,** first- class mail, or electronically (in a means that meets the DOL safe harbor electronic disclosure criteria as outlined in Technical Release 2011-03R;

• On page 2 of the model notice for employers with coverage it reads "If checked, this coverage meets the minimum value standard, and the cost of this coverage is intended to be affordable, based on employee wages." The minimum value (MV) standard means the plan pays 60% or more of the covered benefits in-network. Affordability means full-time employees pay no more than 9.5% of their W-2 Box 1 income or rate of pay for self-only coverage on the lowest cost plan offered by the employer that meets the minimum value standard (60%). Our Affordability Calculator and the HHS' MV Calculator in our Health Reform Resource Center can assist with these determinations Click HERE.
• Page 3 of the DOL model notice for employers with coverage is OPTIONAL. (This page requires entry of information specific to each employee including their portion of the monthly premium for the lowest cost plan offered that meets the minimum value standard. Since the deadlines for final decisions regarding 12/1/2013 early renewals are after this 10/1/2013 notice deadline, many small employers will not have this information.)
• New hires (full-time and part-time) should receive a notice within 14 days of hire date.
• The expiration date on the current DOL model notices is November 30, 2013 . We will notify you via email when the new model notices become available.
• Employers may have another entity (such as a TPA) handle the distribution of these notices on their behalf, but it is the employer's responsibility to make sure notices go out to all of the employees (not just those enrolled on the employer-sponsored plan) within the required timeframe (see Q&A #1 in FAQs on ACA Implementation Part XVI. .
• Some small employers may not be subject to FLSA because they are not involved in interstate commerce and do not meet the test of not less than $500,000 in annual dollar volume of business (exclusive of taxes at the retail level). It is important to remember IRS common ownership rules apply. Therefore, an employer with several small businesses may be one "enterprise" that is subject to FLSA.*

*In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers the following entities: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies. For further assistance with determining whether or not a specific employer must comply with FLSA, here is a link to the DOL elaws: Fair Labor Standards Act (FLSA) Advisor. - Do I have to comply with the FLSA? http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp

** We have seen material from other sources indicating these notices cannot be hand-delivered; but must be mailed to the employees' home addresses. We contacted Elizabeth Schumacher, the DOL/EBSA contact person whose name appears on Technical Release 2013-02. Ms. Schumacher indicated employers may distribute these notices via first-class mail or electronically (in accordance with the DOL safe harbor for electronic disclosure), but these are not the only approved methods of delivery. Hand delivery is an acceptable means of distribution. For example, small employers may hand-deliver these notices when they pass out checks, distribute renewal packets, or give new hire kits.

I have various "model letters" "receipt of notice", and Employee Memo explaining, that my sources have provided, if you want you can PM me and I will share.

Sandy

[buzzardbreath]

Draconian Penalties

There is a mentality among taxing and governing authorities that the most certain way to get everyone to do what they want them to do is to threaten a Draconian Penalty.

There are the $100/day penalties for being late on the 5500-series for benefit plans. There is a $10,000 penalty for failing to file the information return for having a foreign bank account. Now there is an equally huge penalty for new Form 8948 for foreign investments. Now this thing.

The real effect when people find out they have failed to file and are now subject to Draconian penalties? They just don't file, period. They're not late, they're not outwardly cognizant, they just don't file period. This backfires on the IRS and other govt factions.

Some of this stuff begs for open revolt. Some hoary-headed swain once said "The best way to rid a society of a stupid law is to enforce it."

[S T]

This just received 9/12/2013 with links and model Notices

The Department of Labor (DOL) has announced that it will not levy penalties on employers covered by the Fair Labor Standards Act who fail to notify their employees of Exchanges by the PPACA's October 1, 2013 deadline.

DOL FAQ http://www.dol.gov/ebsa/faqs/faq-not...geoptions.html Frequently Asked Questions and model notices

http://www.dol.gov/ebsa/faqs/faq-not...geoptions.html Info on the Fair Labor Standards Act

http://www.dol.gov/elaws/flsa.htm Assests employers in determining if they need to be Fair Labor Standards Act Compliant

Sandy

[JON]

Who Else

I think most insurance carriers have been in contact with my clients, helping with notices to go out. ADP has sent letters referencing customers to their website to get appropriate information out. We have been telling poeple to contact carriers and most have. Now the question is those employers who provide no health insurance with at leat one employee grossing over $500,000 again we gave them websites and strongly suggested they at least interview insurance carriers to know what to file and the penalties they may end up with no coverage.

Really do not think this is our job, but they are pushing it into our ballpark. who is going to require "proof of coverage" for individuals you prepare 1040s for - on their 2014 returns. I guess we are required too.

[Lion]

I have a client, well over $500,000 in revenues from across the country but only a few employees. His lawyer told him that with fewer than 10 employees, he has to do nothing. I cannot convince him that he DOES have to send out a notice by 1 October. Maybe if I charge as much as his lawyer, he'll listen to me!

[luke]

Lion

for a client like that, I would go to website and print out CORRECT info and give it to him AND suggest he give it to his lawyer!

[luke]

dont think

Most businesses that have any employees and have workmens comp etc. will have a bulletin board or some place where they will post information that are mandated by local labor laws. All they have to do is post the notice there. I don't think it requires that the employees be mailed a copy??

And if you have a handful of employees, you could do a payroll stuffer.

I think a payroll "stuffer" would work fine (as long as its before Oct 1st)
Bulletin board posting will NOT suffice!

I agree with others that this should NOT be our job but I GUARANTEE my clients will be expecting ME to provide them with the necessary letter!
Maybe another profit center for me??

I have NOT had ANY clients say they were contacted by ANY insurance person about this or any other aspect of ACA!

[Lion]

I printed out a good summary from the US DOL and emailed it to him and also a sample letter (even though the DOL article included a link to the sample letter) trying to make it as easy as possible for him. Also, suggested that his payroll company Paychex might have a letter that he could include with paychecks. That's when he told me his lawyer already told him he doesn't have to do anything!

[S T]

While no one seems to know as professionals, insurance agents/brokers, tax and business professionals, etc where the responsibility lies in notifying our Small Business clients/employers------

guess all we can do is provide the info, and ultimately it is the Employer responsibility

DOL has released a FAQ - that does state if "your company is covered by the Fair Labor Standards Act" ---------- "there is no fine or penalty under the law for failing to provide the notice.

All I am doing is forwarding the information, for the Employer to complete. There will be one or two Employers that I prepare payroll for (small less than 5 employees) that I will complete for them to give with the next pay period.

What a "PITA" this is!!!

Sandy

[luke]

Good Catch

Good Catch S T - at least that takes the "pressure" off of most of us. Now that penalties are not in play it takes some of the pressure off!
THANKS!