It’s Still Here for Now — the Affordable Care Act!

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As President Donald Trump’s administration begins its work, rumors that most or all of the Affordable Care Act (ACA) could be repealed are plentiful. Over the next few months, the future of the law should be known. However, the ACA remains in place for 2017 and employers should move forward accordingly.

Currently in effect under the ACA, business owners with 50 or more employees who are either full-time (FT) or full-time equivalent (FTE) are required to offer health insurance coverage to their FT employees. FTEs are determined by dividing the total hours of all part-time employees worked in one month by 120. Seasonal employees are not included in this calculation.

While the test to determine coverage requirements is based upon calculating the number of both FT and FTE employees, employers are only required to provide health insurance to those employees who work 30 or more hours per week. In order to maintain compliance, health insurance coverage must pass these two tests.

  1. Minimum Value Coverage: The employer’s health insurance plan must pay out at least 60% of the incurred medical charges.
  2. Affordable Coverage: The employee’s contributions toward health insurance coverage cannot exceed 9.5% of their W-2 wage income.

Employers with 50 or more FT and FTE employees, who wait for the new administration’s plans for health insurance, may be underestimating the impact of potential penalties for not offering health insurance to all eligible employees. Employers who fail to offer appropriate coverage could face a penalty of $2,000 per year for each full-time employee, reduced by 30 if one or more FTs receive assistance from a Health Insurance Marketplace offered by the federal or state government.

The ACA is still law despite its uncertain future. Compliance is especially critical for employers in the restaurant, hotel, and manufacturing industries where large workforces are common. Business owners should continually evaluate their FTE employees and the cost to provide health insurance coverage to those eligible against the potential noncompliance penalties.

Look for future posts on how changes to the ACA will affect businesses. For individual questions or more information on how the ACA influences a restaurant, hotel, or companies that serve the hospitality industry, contact Aaron M. Boker at 240.364.2582 or

About Aaron Boker

Aaron Boker has written 12 post in this blog.

As a senior manager in Aronson LLC's Tax Services Group, Aaron Boker is a proactive advocate for his clients, which include restaurants, hotels, C corporations, S corporations, partnerships, individuals, trusts, and private foundations. In addition to his tax compliance and planning work, he is committed to building the firm's hospitality industry practice and has a deep understanding of the unique business issues faced by companies in this market. Aaron's clients benefit from his dedication to excellent service and his commitment to his work as part of a results-driven tax team committed to staying at the forefront of the profession.

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