Many New Businesses reimburse their employees for individually purchased health insurance: beware, because new Affordable Care Act (ACA) penalties may apply in this case.
Usually, health reimbursement plans cannot be used to reimburse employees for their health insurance premium, but can be used to reimburse other health expenses. Employers that violate this rule can be fined up to $100 per employee per day, or $36,500 a year per employee.
To avoid this penalty, pay all employees a lump sum each year, regardless if they buy or not individual health insurance. These payments should be included in employee'e gross income, which is not very attractive to employees, because is not tax-free (all payroll taxes apply to this extra income), but is less expensive than the ACA penalty.
Employees with 50 or more full-time employees:
An employer with 50 or more full-time employees or full-time equivalents is considered an "applicable large employer". This is very important to be determined if you are a large employer or not, especially in the situations when you have close to 50 employees or if you had over 50 employees in 2014 and are now under that number. The IRS is coming after companies that reduce their workforce or jugle work hour for the sole purpose of getting under the 50 employee treshhold. You need to know how many employees you had in 2014 and how many you will have in 2015, including any workforce fluctuations.
Employers with exactly 50 employees can purchase coverage through Small Business Health Options Program (SHOP)
You have to file for 2015 an annual return reporting whether you offered health coverage, and if so, what coverage you ofered to your full-time employees.
Employees with less than 50 employees:
If you have less thatn 50 employees, you are not subject to the employer shared responsability provision.
If you had 50 or less full-time employees in 2014 (including any fluctuations in workforce), than in 2015 you can purchase health coverage through the Small Business Health Options Program (SHOP)
If you had less than 25 full-time employees with an average wages less than $50,000 and you cover at least 50% of your full-time employee's health care premium costs, you may be eligible for the small business health care tax credit. You may also be eligible if the coverage has been purchased through SHOP.
Startng 2015, all employers, regardless of size, that provide self-insured health coverage must file an annual return reporting certain information for individuals they cover.