Podcast: Affordable Care Act - What HR Needs to Know in 2015

Hosted by: David Weisenfeld

Starting this year, certain employers are subject to penalties if they fail to maintain health insurance coverage that meets Affordable Care Act (ACA) requirements. For that reason and more, many companies are viewing 2015 as a key transitional year. So what's an employer to do to avoid running afoul of the ACA?

This XpertHR podcast features a conversation with New Jersey employment attorney Jim Anelli, who heads LeClairRyan's Affordable Care Act team and speaks frequently on ACA issues. Anelli says, "Many companies I can tell you have just started the reporting process and will likely have to recreate information from their existing data; that will be quite a challenge."

According to Anelli, the one penalty that is becoming quite relevant yet has not been much discussed is the so-called "excise tax" penalty. He notes that penalty can be up to $36,500 per year per employee, which he says "could be crippling." Anelli says the assumption is the Internal Revenue Service will be lenient for technical or unintentional violations. But if the IRS believes the employer was aware of violations and failed to report, the employer could face a serious penalty.

Another issue to watch, Anelli says, continues to involve the counting of employees under the ACA's 50-employee threshold. He predicts a lot of collective actions involving independent contractors who believe they should be classified as employees, making their employer subject to the ACA.

Some other key points on the podcast:

• Many franchise owners are still unaware of aggregation issues in terms of counting employees;
• Companies on the 50-employee bubble should act as if they are covered;
• Employers should not wait to ensure they are in compliance.

Anelli asserts that companies are still trying to do too much themselves with the ACA, and need to reach out to professionals in the insurance, accounting and legal areas to at least review the decisions they have made.