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. Leading CFOs are focusing on the legislation and its potential implications.
The Affordable Care Act – an update
Kate Barton reviews the recent changes to the ACA and how they affect CFOs. [See a transcript of this video]
The ACA’s employer mandate for businesses with at least 100 full-time equivalent (FTE) employees took effect on January 1, 2015. Going forward, employers could face excise taxes if they do not offer these workers coverage that meets the law’s requirements.
The Congressional Budget Office (CBO) projects that between 2015 and 2024, employers will pay $139 billion in excise taxes for failing to comply with the ACA. It is vital that CFOs act immediately to mitigate unintended tax liabilities.
For many companies, the workforce fluctuates. Businesses are still struggling with how to meet their reporting obligations to quantify the number of FTEs on their payrolls.
Addressing the provisions of the law will take an integrated approach, with participation from functions that include human resources, finance, information technology, internal audit and tax.