We chose the route of not offering health coverage through the small business i.e. the farm. Given capital business investments, 179 deductions, it appears to be the best route for this year. We were able to secure a silver plan at quite a discounted rate. Our "full time"employees whom we pay quite well, still qualified for substantial subsidies. I realize we will not be able to deduct the cost of the employees premiums but the subsidy to them outweighed providing them the plan.
Now with respect to the penalty or "contribution" as it is known, we will pay this quarterly like we do now at the same time we file our unemployment tax. The difference is that since the business/farm is not offering health insurance, all workers hours per quarter up to 520 will be calculated to arrive at full time equivalents. The employer will then pay whatever the rate per quarter for a FTE. The business I believe will be allowed a certain number of FTEs per quarter before paying the contribution. I don't remember if it is 4. Since we hire seasonally, the high school and college kids will fit into the 2nd and 3rd quarters and the farm contribution will only pay for them during these quarters similar to the unemployment tax. We will go from paying nothing to paying for around 13 FTEs. Though we are not thrilled with this "contribution", we look at it as our share of our employees healthcare costs. (This opens another can of worms regarding paying your workers higher wages which will be taxable to them and increase the employers payroll tax as well, in order that the employes can afford their insurance. I will not discuss it now but it is an important topic. Suffice to say that the Federal and State subsidy makes the insurance affordable.)
What does bother me is that similar to unemployment insurance premiums, we will pay into the fund for many high school and college kids who are covered by their parents. Because we offer no business plan, all employees hours are calculated as mentioned above to arrive at the FTE contribution. The parents are already paying and now we will too. This to me is similar to the fact that we pay into the unemployment insurance fund for high schoolers and college kids who would never qualify for unemployment because they leave voluntarily. Oh well, the government has got to get money wherever they can.
As to other issues brought up by Mike, I am not sure if there are clear answers yet. I was always told by tax specialists to save as much money as you can in the present year and worry about next year. Circumstances and rules often change.
I believe I got this right but do not rely on it. This is my understanding of the rules. Check for yourself. We used Blue Cross Blue shield to get clear on our choice and then went to Health Connect to sign up. Blue Cross was very helpful. It was not easy but we got through it.
I hope this helps. Good Luck! It is with great trepidation I send this out.
Sent from my iPad
> On Feb 12, 2014, at 3:09 PM, Andrew Knafel <[log in to unmask]> wrote:
> Hi anyone out there offering some health insurance assistance to employees under new laws? It is easy to deal with the "seasonal" folks who work under 120 days/year, but if someone works full time for 6 months and then is back to school or some other thing, it appears they need to be offered coverage assistance on par with the long term year-round folks... I'd be interested in any thoughts or ways folks are covering or not covering their employees.
> THank you!
> Clear brook farm