What Does the Affordable Care Act Mean for Law Firms?

Many law firms have seen an uptick in business since the Patient Protection and Affordable Care Act (ACA), aka Obamacare, was signed into law in 2010. Healthcare reform has brought clients seeking legal advice on how to comply with the complex healthcare laws. Business owners might need help revising benefits offerings and updating employee manuals or separation agreements to avoid employment-related lawsuits. And clients in the healthcare industry may be looking for legal counsel as they grow their operations and restructure their companies to adapt to a rapidly expanding healthcare market.

If you manage a law firm, you might be excited about all of the new business opportunities that the Affordable Care Act presents, but have you taken the time to think about how the new laws will impact your firm and your employees?

You will have many important decisions to make and deadlines to meet as the health reform laws are implemented. Many larger law firms already offer benefits that meet or exceed the minimum requirements, but there are specific calculations, notice requirements, new tax provisions and other changes of which you need to be aware.

The majority of the new mandates will go into effect in 2014 and beyond. However, there are steps you need to take now to make sure your firm is prepared for what lies ahead.

Health Reform Timeline – Updated July, 9, 2013

The first thing you need to know is that the Affordable Care Act is being rolled out in phases. Here’s an overview of upcoming provisions.

2013

Medicare payroll tax

• An additional Medicare payroll tax of 0.9% will apply to earned income in excess of $200,000 for individuals and $250,000 for married couples filing jointly. You will be required to withhold this 0.9% tax from each of your employees who earns wages above the $200,000 individual income threshold, regardless of the employee’s filing status or employee’s spouse’s income, if any. An analogous provision applies to self-employed persons.

• Also, a 3.8% unearned income Medicare surtax on the lesser of net investment income or the excess of modified adjusted gross income (AGI) over the same threshold amounts will go into effect for tax year 2013.

Employee exchange notice

• Notifies employees of the availability of health insurance exchanges (explained below)
• Original deadline for employers to issue the notice was March 2013, but it’s been delayed to late summer or early fall 2013

Continue reading this Affordable Care Act affecting law firms article at Law Journal Newsletters.