I have a new S Corp client. The owner is reimbursed for his health insurance by the corp (reported on W-2, deducted on his personal), his 2 other employees are not. My understanding is this an issue with the ACA and non-discrimination rules.
Under the new regs for family affordable coverage starting in 2023, even if the employer offered a plan for the other 2 employees, it would PROBABLY be above the 9.61% threshold of the employees' household income. Therefore, the employees would be able to buy a plan from the exchange and be eligible for the PTC.
I have 2 questions on this:
1. How can the employer determine what the family affordable coverage would be for an employee based on their household income? I understand that this determination is done by the employee to see if they're eligible for the PTC, but if the employer's coverage will be unaffordable and the employee is better off on the exchange, why bother implementing a plan in the 1st place?
2. How does the employer document that any potential plan offered would not be used by the employees short of implementing a plan and incurring admin costs?