{"id":820,"date":"2016-04-21T19:18:51","date_gmt":"2016-04-21T19:18:51","guid":{"rendered":"https:\/\/albanknews.com\/?p=820"},"modified":"2016-04-21T19:18:51","modified_gmt":"2016-04-21T19:18:51","slug":"affordability-level-indexed","status":"publish","type":"post","link":"https:\/\/albanknews.com\/?p=820","title":{"rendered":"Affordability Level Indexed"},"content":{"rendered":"

IRS has published[1]<\/a> the indexed affordable threshold for 2017 at 9.69 percent; up from 9.66 percent<\/span>\u00a09.56 percent<\/strong>\u00a0for 2015. This is the multiplier used at the Exchange to determine if an applicant was offered \u201caffordable\u201d coverage by his\/her employer. The Exchange operates under code \u00a736B, which defines affordable as a premium for single-only coverage not exceeding 9\u00bd percent of modified adjusted gross household income. On the other side of town, the employer is under code \u00a74980H(b) with regards to affordability. In the regulations, IRS offers three options to measure affordability based on pay rather than household income, because it recognized that employers would find it next to impossible to know household income. Remember \u2013 employer penalties are monthly. Those \u201csafe harbors\u201d are\u2026.<\/p>\n

    \n
  1. The W-2 Method<\/u> by which you use the 9\u00bd percent times Box 1 on the W-2. You can project and ballpark, but you don\u2019t really know for sure until you have the W-2.<\/li>\n
  2. The Federal Poverty Level Method.<\/u> Here you multiply the federal poverty level for a single person times 9\u00bd percent. The FPL for 2016 is $11,880 for 48 of the states; $14,840 for Alaska; $13,670 for Hawaii. So, $11,880 \u00f712 = $990\/month x .095 = $94.05; the maximum employee charge you can impose under this method.<\/li>\n
  3. The Rate of Pay Method<\/u> is simple for a salaried employee, because you know his\/her monthly salary. It is simple for an hourly person who works set hours. But because some hourly folks\u2019 hours vary, IRS says you can multiply the hourly pay rate times a factor of 130[2]<\/a> to determine his\/her \u201crate of pay.\u201d Example: EE makes $14.25 an hour. Multiply this by 130 and you have a rate of pay of $1,852.50 a month\u2026times .095 = a $175.98 premium cap for employees earning this hourly rate.<\/li>\n<\/ol>\n

    And, you can use different safe harbors for certain classes of employees. Permitted classes are salaried, hourly, job categories, employees in different geographic locations, collectively bargained employees, or any other bona fide business criteria. Example: An employer might choose to use the federal poverty method for all salaried employees and the rate of pay method for all hourly employees. Technically, the indexing of the 9\u00bd percent is only allowed in \u00a736B that the Exchange operates under. There is no provision for indexing in the code section the employer uses, \u00a74980H(b). However, IRS announced last year[3]<\/a> it has plans to amend the regulations under \u00a74980H(b) to permit indexing, so employers should feel safe to use the 9.69 percent.<\/p>\n

    [1]<\/a> Rev Proc 2016-24<\/p>\n

    [2]<\/a> 30 hours a week times 52 weeks \u00f712 months<\/p>\n

    [3]<\/a> IRS Notice 2015-87<\/p>\n

    \n

    Not everyone is an expert on health care reform. But the folks at\u00a0J. Smith Lanier<\/a>, one of our endorsed services providers, are.\u00a0 For this reason they created a publication called the\u00a0Health Care Reform Alert. J. Smith Lanier has been providing these to its clients since 2010 when the bill was passed and now offers it to the members of ABA.\u00a0It is J. Smith Lanier\u2019s intention in the alerts to take the many pages generated\u00a0by the Centers for Medicare and Medicaid Services, U.S. Department of Labor or Treasury and filter them down into terms that all can understand. For more information on how J. Smith Lanier can help your bank, contact\u00a0Tom Younger<\/a>\u00a0at\u00a0(256) 890-9027.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    IRS has published[1] the indexed affordable threshold for 2017 at 9.69 percent; up from 9.66 percent\u00a09.56 percent\u00a0for 2015. This is the multiplier used at the Exchange to determine if an applicant was offered \u201caffordable\u201d coverage by his\/her employer. The Exchange operates under code \u00a736B, which defines affordable as a premium for single-only coverage not exceeding 9\u00bd percent of modified adjusted gross household income. On the other side of town, the employer is under code \u00a74980H(b) with regards to affordability. In the regulations, IRS offers three options to measure affordability based on pay rather than household income, because it recognized that […]<\/p>\n","protected":false},"author":1,"featured_media":475,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19,27,29],"tags":[],"class_list":["post-820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking","category-health-care-alert","category-hr-news","has_thumb"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/albanknews.com\/wp-content\/uploads\/2014\/11\/HCA.png?fit=500%2C500&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p4Y3P2-de","jetpack_sharing_enabled":false,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=820"}],"version-history":[{"count":1,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/820\/revisions"}],"predecessor-version":[{"id":821,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/820\/revisions\/821"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/media\/475"}],"wp:attachment":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}