It may have been a bitter pill for the Obama administration to swallow, but in early July White House officials announced a one-year delay, until January 1, 2015, in the Affordable Care Act (ACA) mandate that employers with 50 or more full-time-equivalent employees provide health care coverage to their full-time employees or pay penalties. A full-time employee is one who works 30 or more hours per week.

The postponement of the employer “shared responsibility” coverage mandate – also known as “pay or play” – is related to a delay until 2015 in implementing two penalty-related information-reporting provisions. One of the provisions requires reporting by insurers, self-insuring employers and other parties that provide health coverage, and another requires reporting by certain employers concerning the health coverage they offer to their full-time employees.

Consequently, employers will not, for 2014, face the potential $2,000 penalty per full-time employee if they fail to offer minimum essential coverage to all full-time employees and dependents, or the $3,000 penalty per full-time employee who receives subsidized coverage on a public exchange because the employer-provided coverage failed to meet certain affordability and minimum value requirements.

The reason the administration gave for the delay was to allow more time for consideration of ways to simplify the new reporting requirements and for employers to adapt their health coverage and reporting systems.

The administration’s actions do not affect employees’ access to the premium tax credits available under the ACA or any other provision of the law.

The public exchanges are still expected to open on October 1, 2013, to allow individuals and small employers to enroll for healthcare coverage for 2014, and that the subsidies for low- and moderate-income individuals to purchase coverage on the public exchanges also will be provided starting in 2014.

While the “play or pay” penalty has been postponed, employers still have a list of things to do regarding their group health plans and the many other aspects of health care reform which are moving forward. Unaffected by the postponement, for instance, are the reform act’s requirement that most employer-provided health care include coverage for recommended preventive care and the requirement for employers subject to the Fair Labor Standards Act to provide written notices about government-run exchanges to each of their employees and to all new hires by October 1, 2013.

Our firm is holding a workshop on the ACA on September 26 to help keep clients up-to-date on the exchanges and other developments regarding the implementation of the law. Victoria McCoy, president of Crown Benefits, who has previously conducted two workshop sessions for Whalen clients on the ACA, will be the presenter. More details about the program will be sent to clients in September.

Finally, Vorys, Sater, Seymour & Pease has posted on its website an employment alert with implications of the delay of the pay or play penalties. Click here to review.

 

Most business people are always on the lookout for ways to cut the amount of time they spend on mundane tasks. Many of our clients are taking advantage of our firm’s Direct Payment Plan to handle their fees and charges and save time.

Through the Direct Payment Plan, you can have your payment deducted automatically from your checking or savings account. And, you need not change your present banking relationship to take advantage of this service.

In addition to saving time, the Direct Payment Plan has a number of other benefits:

• Fewer checks to write and mail.
• Helps meet your commitment in a convenient and timely manner – even if you’re on vacation or out of town.
• No lost or misplaced statements and your payment is always on time – it helps maintain good credit.
• It saves postage.
• It’s easy to enroll and easy to cancel.

It’s easy to get started. You authorize regularly scheduled payments to be made from your checking or savings account. Your payments will be made automatically on the specified day, and proof of payment will appear on your statement.

The authority you give to charge your account will remain in effect until you notify us in writing to terminate the authorization. If the amount of your payment exceeds your range, we will notify you at least 10 days before the payment date.

To take advantage of this service, download the authorization form, complete it and return to us. The Direct Payment Plan is dependable, flexible, convenient and easy.

Click here to download the form.

 

Be Prepared in the Event of a Natural Disaster and Understand Your Responsibility for Retaining Records

With all the flooding that has occurred in Ohio over the past two months, now is probably a good time to review how you are storing and keeping your tax and financial records safe in case of a natural disaster and how long you need to retain these documents.

Below are five strategies that the IRS recommends to protect your important financial records.

1.  Backup Records Electronically. Keep an extra set of electronic records in a safe place away from where you store the originals. You can use an external hard drive, CD or DVD to store the most important records. You can take these with you to keep your copies safe. You may want to store items such as bank statements, tax returns and insurance policies.

2.  Document Valuables. Take pictures or videotape the contents of your home or place of business. These may help you prove the value of your lost items for insurance claims and casualty loss deductions. Publication 584, Casualty, Disaster and Theft Loss Workbook, can help you determine your loss if a disaster strikes.

3.  Update Emergency Plans. Review your emergency plans every year. You may need to update them if your personal or business situation changes.

4.  Get Copies of Tax Returns or Transcripts. Visit IRS.gov to get Form 4506, Request for Copy of Tax Return, to replace lost or destroyed tax returns. If you just need information from your return, you can order a transcript online.

5.  Count on the IRS. The IRS has a Disaster Hotline to help people with tax issues after a disaster. Call the IRS at 1-866-562-5227 to speak with a specialist trained to handle disaster-related tax issues. You may also visit IRS.gov to get more information about IRS disaster assistance. Click on the “Disaster Relief” link in the lower left corner of the home page.

How long should you keep tax returns and records?

Financial records may have to be produced if the IRS or a state or local taxing authority was to audit your return or seek to assess or collect a tax. In addition, lenders, co-op boards or other private parties may require that you produce copies of your tax returns as a condition to lending money, approving a purchase, or otherwise doing business with you.

We advise clients to keep returns indefinitely and retain the supporting records usually for six years. In general, except in cases of fraud or substantial understatements of income, the IRS can only assess tax for a year within three years after the return for that year was filed (or, if later, three years after the return was due).

For example, if your 2011 individual income tax return is filed by its original due date of April 15, 2012, the IRS will have until April 15, 2015, to assess a tax deficiency against you. If you file your return late, the IRS generally will have three years from the date you filed the return to assess a deficiency.

However, the three-year rule isn’t ironclad. The assessment period is extended to six years if more than 25 percent of gross income is omitted from a return. In addition, where no return was filed for a tax year, the IRS can assess tax at any time (even beyond three or six years). If the IRS claims that you never filed a return for a particular year, keeping a copy of the return will help you to prove that you did.

While it’s impossible to be completely sure that the IRS won’t at some point seek to assess tax, retaining tax returns indefinitely and important records for six years after the return is filed should, as a practical matter, be adequate. Since our firm filed your return electronically, we provided you with a paper copy of the return for your records.

We’re always looking for ways to serve our clients and support them. Whether it’s helping them identify the advantages and disadvantages of converting a Traditional IRA to a Roth IRA or sending them home from our office with a freshly baked chocolate-chip cookie, we strive to provide clients with Five-Star service in any way we can.

Karen Griffin, an administrative specialist with the firm, is also a notary public, and she will assist clients who need a document notarized. Notaries authenticate legal papers by witnessing the signing and verifying the identity of the person signing. Some legal papers are required by law to be notarized to be effective.

In the past Karen has notarized business and personal documents, such as car titles, banking documents, children’s educational records, real estate deeds and sworn affidavits.

If you need a document notarized, contact Karen at 396-4200 or by email beforehand to make arrangements. Make sure to bring some form of photo identification.