May 9, 2013

With the advent of the Affordable Care Act (ACA) rapidly approaching, healthcare reform is a hot topic. Most companies are aware of whether they need to provide insurance to their employees, increased costs and penalties they might face for failing to do so and other major changes that will go into effect in 2014.

There are also a number of changes to consider that have not been as thoroughly discussed. Most importantly, from your company’s perspective, these include the tax hikes and fees that are intended to cover the costs of the ACA. For example, we discussed in a previous post that you might be responsible for paying a fee, on a per-employee basis, for failing to provide coverage. But did you know that even if you provide healthcare, you may still have to pay a fee for any required waiting period before coverage begins?

The most significant increase, though, is going to be from the Medicare tax on employer payrolls, which will go from 1.45% (the current rate) to 2.35% after the first $200,000 of wages have been paid. Combined with the fact that expanding your staff may cause you to lose potential tax credits for any insurance that you do provide, the changes that will accompany healthcare reform make the outsourcing services provided by FRS more valuable than ever.

As you learn more about how the hidden costs of Obamacare will affect your company, don’t choose between keeping down your payroll and healthcare costs and taking on new business. With FRS, you can do both.