Q: What do I need to know about the Affordable Care Act in 2016?
A: Starting January 1, 2016, the Affordable Care Act (ACA) will offer three important hurdles for pizzeria restaurant owners if you have at least 50 full-time workers (defined as someone who works at least 30 hours per week). First, starting in 2016, you will be required by law to offer coverage to at least 95% of your full-time employees. You will have to pay an excise tax if you don’t meet this requirement and if at least one of your full-time employees receives a premium tax credit when purchasing coverage through one of the government exchanges.
Secondly, you’ll need to meet the February 1 deadline for furnishing Form 1095-C to full-time employees. This form describes what health insurance coverage was made available to the employee. These forms must also be filed with the IRS; failure to file them can result in fines of $500 for each form that wasn’t submitted. To make sure you don’t incur these penalties, work with your accountant to address all common law employee issues and identify all full-time employees for each month of the past tax year.
Finally, you’ll need to manage your exposure to the “Cadillac tax,” a 40% excise tax on employer-sponsored health coverage that provides high-cost benefits ($10,200 for individual coverage and $27,500 for self and spouse or family coverage).
If you’re required to provide health coverage to your employees, I encourage you to discuss ACA rules with your accountant or healthcare provider soon. If you have multiple units under common ownership, keep in mind that the government also takes into account “full-time equivalents”—that is, two or more part-time employees whose hours add up to a full-time load. For example, two workers who each log 15 hours a week would make up one full-time equivalent (2 part-time employees x 15 hours = 30 hours, which is equivalent to one full-time employee). So you may be surprised to find out that you have to comply with ADA requirements when you didn’t think they applied to you.