Healthcare Reform – Employers Should not Wait to Decide on Health Coverage – Los Angeles Income Tax Planning and Income Tax Litigator Attorney Bruce Givner

by Bruce Givner on January 2, 2013

Starting in 2014, the Affordable Care Act, aka Obamacare, will require employers to offer health coverage to their full-time employees if the employer employs 50 or more full-time equivalent employees. Further, the health coverage must be affordable and provide minimum essential coverage.

Employers who do not provide the requisite health coverage can be subject to a penalty if:

1. At least one of the employer’s full-time employees has an income of less than 400% of the federal poverty level, and

2. The employee uses a premium tax credit to buy health coverage.

The penalty is $2 thousand per year for each full time employee. However, the first 30 employees are not penalized.

Employers who provide health coverage that provides minimum essential coverage but is not affordable can also be subject to a penalty if:

1. An employee pays more than 9.5% of his or her household income for health coverage, and

2. At least one full-time employee uses a premium tax credit to purchase this health coverage.

The penalty for not providing affordable health coverage is $3 thousand per year for each full-time employee.

Finally, if the health coverage is affordable, but doesn’t provide minimum essential coverage, an employer will also face a penalty of $2 thousand per year for each full-time employee, excluding the first 30.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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