Geared Up Issue 2 2015 | Page 27

team, including knowledgeable business advisers (like a Certified Public Accountant and/or a health insurance broker). Together, these coaching resources can help you develop and update a solid plan. Create a Solid, Flexible Plan It is important to develop a coaching team, including knowledgeable business advisers (like a Certified Public Accountant and/or a health insurance broker). from knowing employees’ household incomes and because employers may offer a range of plans, three“safe harbors”are permitted by the IRS. The first“safe harbor”— the “W-2 safe harbor” — says an employee’s contribution to the lowest cost, self-only health insurance plan cannot exceed 9.5 percent of that employee’s individual income (Box 1 of Form W-2). The second “safe harbor” — the “rate of pay safe harbor”— says an employer may base an employee’s contribution level at or below 9.5 percent of the self-only premium on the employee’s rate of pay at the beginning of the coverage period for an hourly employee. The third “safe harbor” — the“federal poverty line safe harbor”— says an employee’s contribution to the lowest cost, self-only premium for the year cannot exceed 9.5 percent of the federal poverty line for a single individual. An employer can utilize a combination of these three “safe harbors” if necessary. Once a “midsize”or “large”business has established systems to determine their business’s size and determine whether coverage is affordable, they can periodically revise changes when plan renewals come about, and they will be prepared for annual employer mandate reporting requirements. Establishing systems early and monitoring results is necessary because the IRS will require annual reporting by employers in order to verify that affordable coverage was offered to full-time employees. Despite the one-year reprieve from the employer mandate offering requirements, even “midsized”businesses must comply with the reporting requirements early next year for the 2015 tax year. Similar to providing employees with W-2 forms, employers must provide employees with 1095-C forms before Feb. 1, 2016. Emplo 啕́ݥ