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Production Companies

Employers with 50 or more full-time employees and equivalents must either offer health insurance to their full-time employees and dependents, or pay a penalty tax if any such full-time employee or dependent purchases subsidized coverage on a government-run health exchange (Employer Mandate). We offer an extensive ACA Production Company Support Program that will meet all of your needs.

 

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Crew & Talent

All U.S. citizens, permanent residents and foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes, must obtain acceptable health insurance or pay a tax penalty.

 

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Alert: Group Health Plans that Fail to Cover In-Patient Hospitalization Services

November 12, 2014 – Notice from the Department of Health and Human Services (HHS) and the Department of the Treasury (including the Internal Revenue Service) regarding Group Health Plans that Fail to Cover In-Patient Hospitalization Services

The IRS has announced that it will amend proposed Affordable Care Act (ACA) regulations to clarify that plans that do not provide substantial coverage for in-patient hospitalization services or for physician services (or for both) (referred to as Non-Hospital/Non-Physician Services Plans) will not satisfy the minimum value (MV) requirement regardless of whether they appear to do so through the online MV Calculator (Excel® file), along with the Department of Health & Human Services’ MV Calculator Methodology (PDF).

An employee who is offered coverage under an eligible employer-sponsored plan that provides affordable and MV coverage may not receive premium tax credit assistance for coverage on the public exchange. An applicable large employer may be subject to a section 4980H assessable excise tax payment of $250 per month for each full-time employee who receives premium tax credit relief on the public exchange where employer-sponsored coverage is offered but does not satisfy the MV requirement.

Click to Read the Full Notice (PDF)


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Alert: Final Employer Mandate Regulations Issued

Compliance Deadline Summary

  • January 1, 2015: Employers who averaged 100+ full-time and full-time equivalent employees on a monthly basis in 2014.
  • January 1, 2016: Employers who averaged 50+ full-time and full-time equivalent employees on a monthly basis in 2015.

Please see below for detailed information regarding the final Employer Mandate regulations. To assist with your ACA strategy and planning, we also recommend reading our White Paper/FAQ booklet The Affordable Care Act: What You Need to Know . It contains detailed FAQs and the latest ACA information as it applies to the entertainment industry.

Please read this important ACA alert for provisions that may impact your company’s obligations under the Affordable Care Act (ACA).

On February 10, 2014, the U.S. Treasury Department and IRS issued the final regulations implementing the employer-shared responsibilities (Employer Mandate) under the ACA. These regulations revise some important employer compliance requirements that take effect in 2015 and feature some significant changes that will impact the entertainment industry.

Key highlights are featured below, followed by greater explanation. A more detailed analysis will be issued pending a complete analysis of the regulations.

Employers that average at least 50 but fewer than 100 full-time/full-time equivalent employees in 2014 generally will not be subject to the Employer Mandate obligations until the first day of the employer’s health plan year beginning in 2016.

On a one-time basis, an employer can use a 6-consecutive month period in 2014, rather than the entire year, to determine if it meets the 100 full-time/full-time equivalent employee threshold.

For 2015 only, Employers with 100 or more full-time/full-time equivalent employees need only offer coverage to 70 percent of their full-time workers in 2015, instead of the previously-required 95 percent, to avoid the $2,000 annual penalty for each full-time employee. However, other penalties will still apply to employers who fail to offer coverage to all full-time employees.

For 2015 only, an employer with at least 100 full-time employees that is subject to the $2,000 annual penalty for failing to offer compliant coverage to at least 70 percent of its full-time workforce is entitled to a safe harbor exclusion of 80 instead of 30 full-time employees.

Employers may treat a re-hired or recalled employee as a new employee for ACA purposes if the employee failed to have a paid hour of service for 13 weeks (or, if shorter, a period of at least four weeks and as long as the preceding period of employment).

  • Medium-Size Employer Exception for 2015
    Employers that average at least 50 but fewer than 100 full-time/full-time equivalent employees in 2014 generally will not be subject to the Employer Mandate obligations until the first day of the employer’s health plan year beginning in 2016. The employer is required to certify that it did not reduce its workforce below the 100 full-time/full-time equivalent employee threshold to avoid the Employer Mandate in 2015, and that it did not cancel or materially alter any group health plan coverage in effect on February 9, 2014. Employer size continues to be determined on a “controlled group” (i.e., production family) basis, and takes into account not only actual full-time employees but also “full-time equivalent employees” who are determined by tallying hours worked by part-time employees in a month and dividing by 120. As with the initial proposed rules, companies will need to combine corporate and production workers inside their controlled group in determining whether they satisfy the medium-size employer exception for 2015.
  • Special Transition Measurement Period for 2015
    Other special rules govern how to determine an employer’s size. Normally, the employer tallies its average number of full-time/full-time equivalent employees on the business days of the prior year. However, on a one-time basis, an employer can use a 6-consecutive month period in 2014, rather than the entire year, to determine if it meets the 100 full-time/full-time equivalent employee threshold.
  • 70 Percent Threshold for $2,000 Annual Penalty
    Employers with 100 or more full-time/full-time equivalent employees will still be subject to the Employer Mandate starting in 2015. These employers need only offer coverage to 70 percent of their full-time workers in 2015, instead of the previously-required 95 percent, in order to avoid the penalty for failing to offer coverage to substantially all of their full-time employees ($2,000 annual penalty per full-time employee, minus the first 80 full-time employees in 2015). Starting in 2016, coverage must extend to 95 percent of full-time employees to avoid the $2,000 annual penalty per full-time employee (minus the first 30 full-time employees in 2016 and thereafter).
  • Some Penalties Still Apply to Employers Who Fail to Offer Coverage to All Full-Time Employees
    While the reduced 70 percent threshold described above might appear appealing, some penalties will still apply to large employers (those who employ 100 or more full-time employees) who fail to offer coverage to all full-time employees. For example, if an employer offers coverage only to 75 percent of its full-time employees, and the full-time employees not offered coverage obtain subsidized insurance from a public exchange, the employer is subject to a $3,000 annual penalty for each full-time employee who obtains such subsidized coverage, capped at what the employer would have been penalized had the $2,000 annual penalty been assessed across all full-time employees (minus the first 80 in 2015 and first 30 in 2016 forward).
  • Seasonal Employees Defined
    Seasonal employees, defined as those in positions for which the customary annual employment is six months or less generally on a recurring basis, may be treated like “variable hour” employees and have their hours of service averaged over a “measurement period” of up to 12 months, even if they are working full-time. The practical effect of this is that most employers will have no obligation to offer coverage to seasonal employees. Further analysis will be required to determine the applicability of the seasonal employee concept to the entertainment industry.
  • Break in Service Reduced to 13 Weeks
    Employers may treat a re-hired or recalled employee as a new employee for ACA purposes if the employee failed to have a paid hour of service for 13 weeks (or, if shorter, a period of at least four weeks and as long as the preceding period of employment). This break in service standard is relaxed from the proposed regulations, which defined a break in service as 26 weeks.
  • IRS Reporting Regulations
    Final regulations will be issued shortly to streamline the employer information reporting requirements related to the Employer Mandate, and we will circulate an ACA Alert as soon as they are issued.

As noted above, a more detailed analysis of the final Employer Mandate rules and their impact on the entertainment industry is forthcoming. More information may also be found here. Meanwhile, please feel free to submit any questions to us at aca@ep.com or visit our ACA Compliance Center.


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July 23, 2012

Recently, the United States Supreme Court upheld most provisions of the federal health care reform law, formally known as the Patient Protection and Affordable Care Act (“Act”). EP is committed to taking the lead in complying with the Act’s provisions as they evolve. A summary of the Act’s major provisions impacting you through implementation of the employer health coverage mandate tax in 2014, including remaining open issues that require future clarification, follows:

YEAR ISSUE COMMENTS
2012 W-2s
Starting in calendar year 2012, W-2s issued in 2013 must contain the value of medical coverage provided to employees, which excludes benefits paid under union contracts.

EP is currently preparing to reach out to clients that offer non-union plans to ensure that their carriers and/or plan administrators are prepared to provide this information in a manner that will facilitate timely delivery of the 2012 W-2s.

2013

Health Flexible Spending Accounts (Health FSAs)
Commencing with calendar year 2013, employees enrolled in Health FSA plans will be subject to an annual cap on contributions of $2,500.

EP will incorporate this requirement as part of our year-end system changes to ensure we will be ready to impose the cap as of January 1, 2013.

2014

Employee Medicare Tax
Effective January 1, 2013, the employee portion only of the Social Security Medicare tax will increase to 2.35% from 1.45% (0.9% increase) on all subject wages over $200,000 ($250,000 married filing jointly) per year.

EP will incorporate this requirement as part of our year-end system changes to ensure that we will be ready to impose the tax as of January 1, 2013.

2014 Employer Mandate Tax
Employers having over 50 full-time employees must offer their full-time employees (i.e., those employed an average of 30 hours per week) minimum essential health coverage or pay a separate tax. If a covered employer does not offer required health coverage to all full time employees and at least one of those employees receives federal premium assistance to secure health coverage through an insurance exchange, the employer must pay a penalty tax of $166.67 per month (up to $2,000/yr) times the number of all full time employees, excluding the first 30 of them.

Employers offering required coverage but in a manner deemed unaffordable (i.e., employee’s premium cost exceeds 9.5% of household income) or not sufficiently valuable (i.e., plan covers less than 60% of cost of benefits) and at least one of the full-time employees receives federal premium assistance to secure health coverage through an insurance exchange, the employer must pay a tax equaling the lesser of(i) $166.67 per month (up to $2,000/yr) times the number of all full-time employees, excluding the first 30 of them or (ii) $250 per month (up to $3,000/yr) for each full-time employee receiving premium assistance.

The tax due will be payable by July following the year it relates to (e.g., the 2014 tax will be due in July of 2015).

There are many questions concerning this segment of the law, which ultimately will be addressed in regulations that will be forthcoming from the IRS. Some of the more prominent issues include 1) apportioning the tax among temporary personnel when multiple employers are involved, 2) clarifying a “full time” employee, especially as it relates to temporary or project-based employments, 3) whether the tax will be invoked if union personnel do not qualify for benefits under their agreement for all or part of a calendar year, and 4) how EP will charge for this extra cost.
2014 Health Coverage Auto-Enrollment
Instead of employees having to opt in to participate in employer-sponsored health coverage, employers with more than 200 full-time employees are required to enroll new full-time employees in the employer’s health plan, subject to legally authorized waiting time periods.
The auto-enrollment requirement will be postponed until regulations have issued on the matter, which is not expected until an unspecified time in 2014.
2014

Employee Participation In Insurance Exchanges
Beginning in 2014, employees will have the option of securing health coverage through exchanges if employers do not provide the required affordable minimum essential coverage.

The rules around this provision are complex, and will be more completely detailed in future correspondence.

We will inform you as soon as possible when new developments arise. In the interim, if you have any questions concerning the above, please contact:

Becky Harshberger
Vice President, Finance and Tax
818.955.6016
bharshberger@ep.com
or Margie De La Rosa
Manager, Payroll Tax Administration
818.955.6358
mdelarosa@ep.com

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Solutions

The federal health care reform law, known as the Patient Protection and Affordable Care Act (ACA), imposes a requirement on employers with 50 or more full-time employees or equivalents to offer substantially all of their full-time employees affordable and adequate health coverage or pay a penalty tax to the IRS for not doing so (the Employer Mandate).

EP will do everything we can to simplify compliance and assist our clients in meeting their obligations.

Click on the numbered sections below for more detailed information about our ACA solutions.

Benefits of Our Program

  • Dedicated ACA Department of industry leading experts
  • Automated Notice of Exchange (NOE)
  • W-2 reporting of employer-paid health care coverage
  • Employee payment deductions within ACA affordability limit to minimize employer health care costs
  • ACA-compliant Start Cards and Time Cards
  • Obtain union benefit plan minimum value coverage and affordability certificate
  • Consulting and evaluation assistance and compliance support

For more information, please contact EP ACA Solutions at aca@ep.com or 855.339.7350.


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U.S. Health Care Reform Legislation Update — July 23, 2012

Recently, the United States Supreme Court upheld most provisions of the federal health care reform law, formally known as the Patient Protection and Affordable Care Act (“Act”). EP is committed to taking the lead in complying with the Act’s provisions as they evolve. A summary of the Act’s major provisions impacting you through implementation of the employer health coverage mandate tax in 2014, including remaining open issues that require future clarification, follows:

YEAR ISSUE COMMENTS
2012 W-2s
Starting in calendar year 2012, W-2s issued in 2013 must contain the value of medical coverage provided to employees, which excludes benefits paid under union contracts.

EP is currently preparing to reach out to clients that offer non-union plans to ensure that their carriers and/or plan administrators are prepared to provide this information in a manner that will facilitate timely delivery of the 2012 W-2s.

2013

Health Flexible Spending Accounts (Health FSAs)
Commencing with calendar year 2013, employees enrolled in Health FSA plans will be subject to an annual cap on contributions of $2,500.

EP will incorporate this requirement as part of our year-end system changes to ensure we will be ready to impose the cap as of January 1, 2013.

2014

Employee Medicare Tax
Effective January 1, 2013, the employee portion only of the Social Security Medicare tax will increase to 2.35% from 1.45% (0.9% increase) on all subject wages over $200,000 ($250,000 married filing jointly) per year.

EP will incorporate this requirement as part of our year-end system changes to ensure that we will be ready to impose the tax as of January 1, 2013.

2014

Employer Mandate Tax
Employers having over 50 full-time employees must offer their full-time employees (i.e., those employed an average of 30 hours per week) minimum essential health coverage or pay a separate tax. If a covered employer does not offer required health coverage to all full time employees and at least one of those employees receives federal premium assistance to secure health coverage through an insurance exchange, the employer must pay a penalty tax of $166.67 per month (up to $2,000/yr) times the number of all full time employees, excluding the first 30 of them.

Employers offering required coverage but in a manner deemed unaffordable (i.e., employee’s premium cost exceeds 9.5% of household income) or not sufficiently valuable (i.e., plan covers less than 60% of cost of benefits) and at least one of the full-time employees receives federal premium assistance to secure health coverage through an insurance exchange, the employer must pay a tax equaling the lesser of(i) $166.67 per month (up to $2,000/yr) times the number of all full-time employees, excluding the first 30 of them or (ii) $250 per month (up to $3,000/yr) for each full-time employee receiving premium assistance.

The tax due will be payable by July following the year it relates to (e.g., the 2014 tax will be due in July of 2015).

There are many questions concerning this segment of the law, which ultimately will be addressed in regulations that will be forthcoming from the IRS. Some of the more prominent issues include 1) apportioning the tax among temporary personnel when multiple employers are involved, 2) clarifying a “full time” employee, especially as it relates to temporary or project-based employments, 3) whether the tax will be invoked if union personnel do not qualify for benefits under their agreement for all or part of a calendar year, and 4) how EP will charge for this extra cost.
2014 Health Coverage Auto-Enrollment
Instead of employees having to opt in to participate in employer-sponsored health coverage, employers with more than 200 full-time employees are required to enroll new full-time employees in the employer’s health plan, subject to legally authorized waiting time periods.
The auto-enrollment requirement will be postponed until regulations have issued on the matter, which is not expected until an unspecified time in 2014.
2014

Employee Participation In Insurance Exchanges
Beginning in 2014, employees will have the option of securing health coverage through exchanges if employers do not provide the required affordable minimum essential coverage.

The rules around this provision are complex, and will be more completely detailed in future correspondence.

We will inform you as soon as possible when new developments arise. In the interim, if you have any questions concerning the above, please contact:

Becky Harshberger
Vice President, Finance and Tax
818.955.6016
bharshberger@ep.com
or Margie De La Rosa
Manager, Payroll Tax Administration
818.955.6358
mdelarosa@ep.com

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Your Obligations Start NOW with Notice of Exchange Compliance

EP can help you meet the

Notice of Health Insurance

Exchange requirement.

October 1 was the deadline for production companies to both distribute the Notice of Exchange (NOE) to existing employees and begin providing to all new hires. EP has created a quick and easy way for you to generate your NOE template yourself. Simply input your information and an NOE template will be generated and emailed to you immediately.

Complete NOE Form

As you may be aware, the federal health care reform law, known as the Patient Protection and Affordable Care Act (ACA), imposes a requirement on employers with 50 or more full-time employees or equivalents to offer substantially all of their full-time employees affordable and adequate health coverage or pay a penalty tax to the IRS for not doing so (the Employer Mandate). As the employer controlling the worker’s day-to-day functions, this responsibility falls on the production company.

Though the Employer Mandate deadline has been extended to January 1, 2015, many employers are preparing to be compliant as of January 2014. More importantly, regardless of whether your company intends to begin your program in 2014 or 2015 or whether the Employer Mandate even applies to your production company, action is required on your part in compliance with recently issued U.S. Department of Labor (DOL) guidance regarding the government health insurance exchanges.

Watch our Notice of Exchange video for information about what you need to do.

Please read through the information below for details on what you are required to do and how Entertainment Partners (EP) can help you.

Overview
Two Versions of NOE
Multi-Employer Health Plans
Timeline of Key Actions to Implement NOE Requirement
EP Cares™ Insurance Program Roll-Out


Overview

Pursuant to DOL regulations issued in May 2013, employers must distribute a notice to all current employees (including union, non-union, full-time, and part-time) about government health insurance exchanges (Exchanges) on or before October 1, 2013. Any new hires on or after that date and through 2014 must be provided the notice within 14 days of hire. Beginning in 2015, the NOE must be provided on the date of hire.

The notice-of-exchange (NOE) rule covers all employers subject to the Fair Labor Standards Act, regardless of whether those employers would be subject to the Employer Mandate. The NOE requirement is not impacted by the delay of the Employer Mandate to 2015.

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Two Versions of NOE

The DOL has published two model NOEs for employers:

Version 1 - Employer Offers Health Insurance

Each consists of two sections. The first tracks minimum required information about the Exchanges. The second covers employer contact information and either basic information about health coverage offered (Version 1) or a representation that the employer does not offer coverage (Version 2).

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Multi-Employer Health Plans

Production companies contributing to multi-employer health plans (e.g., MPIPHP, DGA, SAG, AFTRA, WGA), as a result of employing workers governed by collective bargaining agreements, may receive notifications from the plans to include information in the NOE for union/guild workers’ potential eligibility to participate in such plans. To limit multiplicity of NOEs on account of multi-employer plans, EP is developing standardized language for a single NOE addressing production workers in positions covered under a multi-employer plan and will share the language in the course of helping you prepare your NOE.

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Timeline of Key Actions to Implement NOE Requirement

Date Action
By 10/1/2013 You distribute the NOE to all current employees on your projects by reproducing the customized template NOE from EP and distributing copies individually to each current employee.
Starting 10/1/2013

You distribute the NOE to all new hires on your projects as part of the start paperwork.

NOTE:Since it will be challenging to distinguish in real time who is a new versus returning current hire, EP recommends distribution of the NOE to every individual completing a Start Card. The EP Start Card will be updated to reflect the employee’s acknowledgment of receiving the NOE.

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EP Cares™ Insurance Program Roll-Out

For production companies that plan to offer insurance, EP offers a health insurance solution designed to cover non-union production freelance personnel. Production companies can subscribe now. Open enrollment for production workers starts November 1, 2013. Coverage begins on January 1, 2014. EP Cares™ insurance is portable for the production worker among participating clients and is fully-insured by a single carrier to ensure superior pricing and efficiency.

Production companies are able to purchase the EP Cares™ insurance regardless of whether they are an EP payroll client.

Please visit our ACA Compliance Center on our website for more information about the EP Cares™ health insurance program. If you wish to enroll in EP Cares™, please contact us at epcares@ep.com or 855.339.7350. (Should you decide to participate in the program, we will populate the employer health coverage portion on the first page of Part B in NOE Version 1 for you.)

The interplay between the Exchanges and the ACA is highly complex. We will be available to help you navigate through compliance every step of the way.

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Thank you for your continued support of Entertainment Partners. If you have any questions about this alert or completion of NOE information, please contact our NOE response line at 855.500.2055 or email us at noe@ep.com.

Sincerely,

Your ACA Advisory Team
Entertainment Partners


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