Affordable Care Act regulations

[Questionguy101]

There are 5 employees on payroll of a S-corp, 3 of them are full-time employees. The owner is one of the 3 full-time employees.

The S-Corp has health insurance coverage for the 3 full-time employees only. One of them (not the owner) is of older age, so her premiums are much higher than the other two.

Because of her higher premiums, the S-Corp has an agreement with the older employee that she pays for a portion of the premiums. And her portion of payment is being taken out pre-tax from her paychecks.

Are there any potential violation of the ACA regulations?

[TaxGuyBill]

ACA, I don't think so.

However, it probably is discrimination under ERISA. I don't know much about ERISA, but it would seem discriminatory to me.

[Questionguy101]

ACA, I don't think so.

However, it probably is discrimination under ERISA. I don't know much about ERISA, but it would seem discriminatory to me.

Thank you.

I am just wondering. Is it our job, as an accountant, to make sure the health insurance plan of our clients fulfill all the requirements of the ACA, ERISA, etc? We are not insurance professionals after all. Because of the steep ACA penalty (like $100 a day?) and the ambiguous ACA regulations which open to different interpretations, I am thinking we are throwing ourselves into fire by advising our clients what to do and what not to do about their company health insurance policy. In case something is interpreted incorrectly and they receive a thousands of dollars penalty bill because of it, I am pretty sure they will try to hold us responsible.

Does anyone have the same worry and how do you plan to deal with it?

[TAXNJ]

Insurance & expertise

Thank you.

I am just wondering. Is it our job, as an accountant, to make sure the health insurance plan of our clients fulfill all the requirements of the ACA, ERISA, etc? We are not insurance professionals after all. Because of the steep ACA penalty (like $100 a day?) and the ambiguous ACA regulations which open to different interpretations, I am thinking we are throwing ourselves into fire by advising our clients what to do and what not to do about their company health insurance policy. In case something is interpreted incorrectly and they receive a thousands of dollars penalty bill because of it, I am pretty sure they will try to hold us responsible.

Does anyone have the same worry and how do you plan to deal with it?

Don't worry.
If beyond your level of expertise - don't advise. If comfortable make sure your practice has malpractice insurance.

[taxea]

Your responsibility is to report from the 1095's. Let the insurance companies advise on the ACA issues or have your client visit Healthcare.com and use the employer coverage tool and estimator tool.

[Stringbean]

Original Question

QuestionGuy, I don't think your problem is with the ACA - in fact, from the information you gave us, this S-corp is not even subject to ACA.

I do very much believe you have a problem with non-discrimination provisions of s. 125. There are allowable differences which can alter the employees' contribution such as length of service, part-time status, level of coverage, etc. But I don't believe age or medical condition can create an additional withholding.

[JON]

Problem

Not enough information - if the S Corp has a qualified ACA group plan that is the only way you can get a 105 pre-tax plan that qualifies. If you do have group plan how does the extra charge work.

Went to a seminar Friday - for S corp 2% or more stockholders we are back to the 2008 rules for 2015. In other words even if you do not cover employees if you reimburse or pay the stockholder's insurance - put it on the W-2 (not subject to Fica/Medi) you get the deduction above the line. You could reimburse employees individual policies to 6/30/15.

[Questionguy101]

Don't worry.
If beyond your level of expertise - don't advise.

Good advice. But what's next then? I have no problem at all to admit to them that I do not have the expertise to give advice on the insurance issue and the related regulations. But I think I have to tell them where to go to get the answers. Shall I tell them to go to see an attorney? And what kind of attorney should they go to?

[TAXNJ]

AGENTS and

Good advice. But what's next then? I have no problem at all to admit to them that I do not have the expertise to give advice on the insurance issue and the related regulations. But I think I have to tell them where to go to get the answers. Shall I tell them to go to see an attorney? And what kind of attorney should they go to?

As other reply posters suggested. Also, insurance agents, ACA government websites and many local volunteer organizations and government assistance agencies to name a few.

[JohnH]

I know I have frustrated several clients by refusing to answer ACA questions. I may have even lost one or two over this issue. If so, I really don't care.

But every time someone asks me a question about ACA, I continue to tell them I'm not an insurance agent. I emphasize that they would be better served to ask their current insurance agent, and if he/she says to ask their accountant they should push back, telling the agent that their accountant handlles taxes, not insurance. They should insist that their insurance agent give them answers or steer them to someone who knows. If the insurance agent isn't capable of either giving them an answer or giving them a good referral, they need another agent.

It's odd that so many clients will let their agent/banker/broker off the hook when he says "Ask your accountant", but they won't accept the same response from us. Maybe some of us need to grow a thicker skin.

[Lion]

There are Navigators especially trained for ACA navigation. And, insurance agents should be able to search both on and off the exchanges/marketplaces.

Tell them if they promise not to take tax advice from their insurance agent, you will give them tax advice and not insurance advice!

[kathyc2]

Tell them if they promise not to take tax advice from their insurance agent, you will give them tax advice and not insurance advice!

LOL! I wish I could find an insurance agent that understands APTC to send clients to. Spent over 1/2 hour this morning explaining to an agent how a couple can sometimes both be covered for less net premiums than one can.

[TAXNJ]

CPA firms

There are 5 employees on payroll of a S-corp, 3 of them are full-time employees. The owner is one of the 3 full-time employees.

The S-Corp has health insurance coverage for the 3 full-time employees only. One of them (not the owner) is of older age, so her premiums are much higher than the other two.

Because of her higher premiums, the S-Corp has an agreement with the older employee that she pays for a portion of the premiums. And her portion of payment is being taken out pre-tax from her paychecks.

Are there any potential violation of the ACA regulations?

You might want to refer to a local CPA firm who may have partners or a department that have dedicated services of the ACA. Some accounting firms have accountants getting insurance licenses and may or may not cover the ACA.

Last resort is to start reading about the ACA. Stay away from comments like " if you like your doctor you can keep your doctor" or "your premiums will go down by $2500".

[equinecpa]

Can you Elaborate

Not enough information - if the S Corp has a qualified ACA group plan that is the only way you can get a 105 pre-tax plan that qualifies. If you do have group plan how does the extra charge work.

Went to a seminar Friday - for S corp 2% or more stockholders we are back to the 2008 rules for 2015. In other words even if you do not cover employees if you reimburse or pay the stockholder's insurance - put it on the W-2 (not subject to Fica/Medi) you get the deduction above the line. You could reimburse employees individual policies to 6/30/15.

Do you have further info on this? Need to do some tax planning with a couple S Corp clients who are affected by this?

[TaxGuyBill]

Do you have further info on this? Need to do some tax planning with a couple S Corp clients who are affected by this?

Is there anything specific that you want to know?

Are there any employees BESIDES >2% Shareholders?