The Affordable Care Act: Know The Terms

Are you still unclear about your responsibilities as an employer under the Affordable Care Act (ACA)? Do you find the definition of ACA terms confusing? Here’s a plain English guide to selected terms employers are likely to hear.

Applicable large employer. A large employer is defined as an employer with at least 50 full-time employees or 50 full-time equivalent employees. If you are an applicable large employer, you must offer affordable health coverage to employees and their dependents.

Full-time equivalent employee (FTE). This is an employee who has on average at least 30 hours of employment per week or 130 hours in a calendar month. The number of FTE employees is computed by dividing the total hours of service of all part-time employees for a month by 120. This FTE amount is then added to the number of full-time employees to determine if the grand total is at least 50.

Minimum value. A health plan is deemed to provide essential value if it covers at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan. Be aware that this differs from minimum essential coverage, which is the coverage applicable large employers are required to offer to avoid the employer shared responsibility payment.

Employer shared responsibility payment. The shared responsibility payment is made up of two nondeductible excise taxes assessed against applicable large employers who do not offer qualified health coverage to a specified percentage of employees. These excise taxes apply for 2015 when you employed on average 100 or more full-time employees during 2014. The penalty starts in 2016 if you employed between 50 and 99 full-time employees on business days during 2014.

ACA definitions are complicated but one thing is clear: Getting a correct count of the number of employees working for you is very important. Please give us a call. We’ll consult with your insurance advisor to help assess the ACA’s impact on your business.

Plan Today For Future Long-Term Care Costs

According to the U.S. Department of Health and Human Services, nearly 70% of people turning age 65 will require long-term care, such as assistance with basic personal activities during their lifetimes. With costs of this care ranging from $6,000 to $10,000 a month or more, planning to address that risk is a smart move.

One solution is long-term care insurance. A policy can protect your estate against the impact of extended medical or rehabilitation services. However, the cost of insurance may have you considering “taking your chances” and letting Medicare or Medicaid step in once your resources are depleted. But what happens when either you or your spouse requires nursing home care while the other is healthy and living independently?

Purchasing long-term care insurance has drawbacks. For one, if you never need long-term care, the premiums you paid are wasted. You may be able to mitigate this somewhat by choosing a flexible policy with life insurance benefits.

Another drawback: You face the risk that the insurance company you select will go out of business. Choosing an insurer that is highly rated for financial strength can ease your mind.
On the plus side, long-term care insurance offers tax benefits. When you itemize, all or part of the premium for qualified plans are deductible as health care costs. Depending on the type of policy you buy, benefits paid are generally not considered taxable income.

If you think long-term care insurance is right for you, remember that coverage costs less when you’re younger. Premiums are based on your age and health, and tend to increase past age 60. Another cost-saving move to consider is a “shared-care” policy with a combined pool of coverage that you and your spouse share.

Contact our office before making the final decision to buy long-term care insurance. We’ll help you do a cost-benefit analysis.