Roy F. Glassberg, CPA is a partner at the New York and Florida-based firm, Roy F. Glassberg, CPA PA. The firm was established in 1966 by Herbert Glassberg, LPA to provide advice and tax preparation services for individuals and businesses with the goals of maximizing a taxpayer’s net after-tax return and minimizing the taxpayer’s risk to negative audit results. Roy can be reached at 561 948-6549 or via email at [email protected]
The Small Business Health Care Employer Mandate has been Delayed till January 1, 2015
What does the Employer Health Care Mandate mean for Executive Suite Owners?
For businesses with less than 30 full time employees or 50 full time EQUIVALENT employees (Full Time for this Mandate is defined as an employee that works equal to or greater than 30 hours per week) there are no potential penalties.
Multiple Location Owners be aware:
For purposes of sections 401, 408 (k), 408 (p), 410, 411, 415, and 416, under regulations prescribed by the Secretary, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. Make sure to confirm with your CPA, but it appears that if you have more than one location under common ownership, you will need to look at the number of employees in all locations, as if they were one company.
What is the affect in 2015 for your business(es) if you have more than 50 Full time equivalent employees?
- You will have to offer health insurance coverage for your employees, whereby the employee portion of the premium does not equal more than 9.5% of their wages, or you can be subject to a per employee penalty on all employees above 30. The coverage will need to cover the employee and their dependent children up to age 26, but NOT their spouse.
- You will pay a penalty if one or more of your full time employees receives a government subsidy; An employee can receive a government subsidy if you do not offer insurance or the insurance you provide costs the employee more than 9.5% of the employee’s wages.
- If you offer insurance, and you have an employee that receives a subsidy from the Health Insurance exchanges, you will pay a penalty equal to the LESSER of $2,000 for every full time employee above 30, or $3,000 per subsidized employee.
- If you do NOT offer insurance, you will pay a penalty of $2,000 per employee, though there is not any penalty on the first 30 full time employees.
It appears that most small Executive Center owners will not be subject to any of the potential penalties. But for owners with multiple centers, from 2015 and beyond, there will be interesting planning opportunities.