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Affordable Care Act

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The Affordable Care Act (ACA) is more than a benefits law. It is a tax law that may significantly impact a company’s strategies and operations, and leading company CFOs are focusing on the law and its potential tax implications.

Despite a one-year delay to the employer mandate, other major provisions of the ACA will take effect on 1 January 2014 that CFOs must take into account as they assess their enterprise’s compliance with the law. Companies may want to use 2014 as a practice year to begin voluntarily complying with the law without fear of penalty -- and to make sure they are in a better place to be in full compliance in 2015.

The Affordable Care Act – find out more

EY - video still of Tom McGrath and Kate Barton

Affordable Care Act: Update - Kate Barton reviews the recent changes to the ACA and how they affect CFOs. [See a transcript of this video]

The ACA, also called Obamacare by supporters and critics alike, affects all companies doing business in the US with 50 or more full-time equivalent employees, regardless of whether the company is public, privately held, or headquartered overseas.

ACA and full-time work

Importantly, the law also defines full time as working 30 hours of service per week on average, a standard that is significantly below what many employers use today. Employers who do not offer coverage that meets new standards to full-time employees face excise taxes.

After the Supreme Court ruling last summer, the Congressional Budget Office projected that employers would pay $117 billion in excise taxes under the ACA over the next decade (since updated to $130 billion over 10 years), so it’s vital that CFOs address the ACA immediately to mitigate their unintended tax liabilities.

ACA and the CFO

Many forward-focused CFOs are taking a leadership role in looking at the law holistically, recognizing that it directly impacts human resources, finance, internal audit and tax.  Some CFOs estimate that it may take up to 18 months to budget, plan and implement compliance-driven changes, but with open enrollment starting in October 2013, the ACA must be one of the tax department’s most crucial priorities.

The ACA is law. CFOs need to make decisions now that will help them control current and future costs, avoid unintended tax liabilities and retain a productive workforce.

The Affordable Care Act – find out more

EY - video still of Tom McGrath and Kate Barton

Kate Barton and Tom McGrath from EY discuss the background and implications of the Affordable Care Act and what the ACA means for CFOs. [See a transcript of this video]

View our latest resources on ACA and health care