Bollam, Sheedy, Torani & Co. LLP Co-Hosts Healthcare Reform Seminar for Middle-Market Businesses

Event Offers Valuable Affordable Care Act Information for Employers. End Quote

Albany-Schenectady-Troy, NY (1888PressRelease) October 30, 2013 - While the Affordable Care Act (ACA) continues to spark debate among political leaders, employers and private individuals, middle-market business owners recently joined Bollam, Sheedy, Torani & Co. LLP (BST), Austin & Co. Inc. and Nixon Peabody LLP for an information session designed to address important action items and looming deadlines. While ACA legislation was passed in 2010, the most significant changes highlighted on the much-troubled Health Insurance Marketplace website will be effective in 2014.

ACA represents the most significant regulatory overhaul of the country's healthcare system since the passage of Medicare and Medicaid in 1965. To help small business owners navigate these newest health insurance mandates, industry experts hosted a panel entitled "Healthcare Reform: What You Need to Know," in Schenectady, N.Y. Nearly 100 people attended the event.

The presentation addressed existing healthcare reform regulations, tax implications and action plans for employers. The interactive panel was led by Mary Mlock, partner-in-charge of BST Retirement Services; Judy Cahee, CPA and BST tax partner; Kate Saracene, an attorney with Nixon Peabody LLP; and James Sidford, president of Austin & Co. Inc.

"The ACA's healthcare reform provisions and requirements can be overwhelming, and place heavy regulatory burdens on business owners," said Mlock. "Having as much knowledge as possible will bring employers one step closer to a smooth transition." In the following commentary, the panelists address the impact of the ACA on individuals and business owners.

Q: What are the ACA's major considerations for employers?

A: Almost every employer will have to make substantive changes to its group health plan - changes to the benefits, changes to the eligibility rules, changes to the amount of premium paid by the employer, or some combination of these - in order to comply with the ACA, noted Sidford. "These include a wide range of new taxes and fees; changes in spousal coverage; increased reporting requirements; and a new 40 percent excise tax on so-called 'Cadillac' health insurance plans. The excise tax, which is expected to raise $32 billion once fully implemented starting in 2018, will tend to hit the more generous, low-deductible health benefits often provided to senior managers and union members," he said.

Q: What defines a "full-time employee" under the ACA?

A: Of the many compliance provisions of the ACA, employers may find the most immediate impact will be in determining who qualifies as a "full-time employee" under the law, noted Saracene. "A full-time employee is defined as an employee who averages 30 hours of service for the employer per week, or 130 hours of service per month. Hours of service include hours worked, and hours for which an employee is paid but does not work, such as vacation, holiday, illness or disability, jury duty, military duty or leave of absence."

Q: What is a SHOP Exchange?

A: A key provision of the ACA's insurance reform is the creation of "Exchanges." The Exchanges will be state-based and serve as an aggregator of individual policies sold by private insurers, using the new federal underwriting and rating rules spelled out by the ACA. "The Small Business Health Options Program (SHOP) exchange will serve a similar function for small employers who will be able to pool together to purchase health insurance coverage. For this provision, small employers are defined as those with at least one, but no more than 100 employees. In 2014-2015 only, individual states may redefine the 'small employer' as having 50 employees or less. These insurance reforms mean guaranteed issue and renewal, and no medical underwriting. Self-funded and large group plans do not need to comply with these requirements," said Saracene.

Q: What is the PCORI fee and how much will it cost employers?

A: The ACA imposes a new Patient-Centered Outcomes Research Institute (PCORI) fee, formerly the comparative effectiveness research fee, on plan sponsors and issuers of individual and group policies. The first year of the fee is $1 per covered life per year, with the second year fee adjusted to $2 per covered life. Thereafter, it is indexed to national health expenditures until it ends in 2019. Self-insured HRAs (Health Reimbursement Arrangements) generally are subject to the tax. "If the HRA is integrated with an insured group health plan, both the HRA plan sponsor and the insurer of the group health plan will be subject to the tax," said Mlock. Meanwhile, Flexible Spending Arrangements are not subject to the tax if the plan qualified as an "excepted benefit."

Q: How will additional Medicare tax impact employers?

A: "The additional 0.9 percent Medicare tax applies to an individual's wages, other compensation and self-employment income that exceeds a threshold amount based on the individual's filing status. The threshold amounts are $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year,'' said Cahee.

The "Healthcare Reform" seminar is part of BST's on-going free education series for middle-market business owners. In addition to BST's traditional accounting, audit and tax planning and compliance services, areas of specialization include employee benefit plan development. Practice group professionals evaluate each client's financial and human resources situation, and then designs, installs and administers plans to fit each client's needs.

Tracing its roots back to 1944, BST has evolved from a traditional CPA firm to one of the largest full-service, multi-disciplinary financial and management consulting firms headquartered in the Albany area. The firm recently announced it will be merging with Clifton, N.J.-based Sax Macy Fromm & Co., PC, effective January 1, 2014. The new company, to be named SaxBST, will rank among the "Top 100" firms nationally, with $45 million in combined annual billings.

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