This is the first in a series of articles to help you gain a clear and concise understanding about how the Affordable Care Act may affect your business.
At the end of June 2012, the Supreme Court upheld the Patient Protection and Affordable Care Act of 2010. The Supreme Court's decision stated the government cannot force the public to have health insurance, but the government can tax the public if they don't. What does this mean for you?
Beginning January 1, 2014, under the new law, most individuals who canafford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. If affordable coverage is not available to an individual, he or she will be eligible for an exemption. Those who can afford health care and are not covered will be assessed a penalty on their tax return.
To help the government determine who has health care coverage, employers have been required to report the cost of coverage under an employer-sponsored group health plan on the employee's Form W-2. Reporting the cost of health care coverage on the Form W-2 does not mean that the coverage is taxable. The value of the employer's contribution to health coverage continues to be excludable from an employee's income, and it is not taxable. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.