What Businesses Need to Know about the Affordable Care Act in 2015

In 2015, businesses large and small will be confronted with a number of issues under the Affordable Care Act (ACA), including the employer mandate. Attorney Kristi Gauthier of Clark Hill PLC’s Phoenix office discusses the issues that will be affecting businesses this year.

2015 is a pivotal year for all employers under the Affordable Care Act. Businesses with 50 or more employees are subject to the shared responsibilities mandate, including penalties. Businesses with fewer than 50 employees are not subject to the mandate, but they will still have a number of issues that will affect them.

Kristi Gauthier

Kristi Gauthier

One subject that has gotten a lot of attention under the ACA is part-time employees. The general rule under the ACA is that employers with 50 or more full-time employees or FTE equivalents are required to offer health care coverage to all employees. One strategy some employers are exploring is increasing the number of part-time employees to avoid the 50-employee coverage level. Of course, as Gauthier points out, this strategy will work fine for some industries but be completely infeasible for others. And Gauthier also cautions employers that, while you may not have to offer coverage to part-time employees, you still have to count them when determining the size of your workforce. Employers who want to use this strategy should work with consultants to be sure they are getting the result they want.

Another strategy some businesses are exploring is changing from using employees to using independent contractors. Gauthier says her firm is getting a lot of questions about this option. Contractors don’t count as employees for purposes of the 50-employee level, and employers are not required to offer health care coverage to contractors. However, Gauthier cautions, the IRS looks very closely at independent contractors. This will be a hot issue because, Gauthier says, there has been a lot of misclassification as regards independent contractors. The IRS applies a very stringent test. Again, employers who want to pursue this strategy should work with lawyer consultants who can help them comply with the law. Just labeling someone a contractor won’t save you.

There are also some tax code changes that could affect small businesses, including IRAs and similar items. Gauthier suggests that 2015 could be a year when there are some changes to the ACA. Repeal is almost certainly not going to happen. However, there are been consistent pressure by employers to restore the definition of full-time employee to someone who works 40 or more hours per week. Gauthier says that, while the 40-hour definition may not be restored, there could be a compromise on a number such as 35 hours.

Kristi R. Gauthier is a senior attorney in Clark Hill PLC’s Phoenix, Arizona office and concentrates her practice in Employee Benefits law. Kristi is a trusted advisor and counselor to employers of all sizes in both the private and public sector on a wide variety of employee benefits compliance areas. The Legal Broadcast Network is a featured network of the Sequence Media Group.

Will Obama's SOTU Lead to Tax Change? Tax Attorney Rob Wood Is Doubtful

President Obama has delivered his State of the Union address for 2015. The question always arises, after a speech by the President, whether any new legislation will result from presidential suggestions. Tax attorney Rob Wood offers his opinion in this report based on his Forbes article “State Of The Taxing Union? Platitudes So General They Could Be Pitching Flat Tax.”

Rob Wood

Rob Wood

Wood says that there were some interesting suggestions but that they are more relevant to the next two years than to the immediate future. Given that Republicans control both the Senate and the House of Representatives, an increase on the capital gains tax rate to 28% “is not likely.” Some of the other matters discussed by the President were not new, including a bank tax proposal. But “most of it is just posturing for a presidential election,” in Wood’s opinion. It’s unlikely that there will be a major tax bill “in the next year or so.

Both political parties seem to be interested in reducing the corporate tax rate to 28%, and that might be are area where there could be agreement. America’s tax rate of 35% is high compared to tax rates in other countries. However, Wood suggests that many companies, large and small, are not actually paying the 35% rate. “They are finding a way with transfer pricing or other . . .  international strategies” to avoid the full tax rate. And that sort of revision takes time.

Wood believes that the IRS might actually collect more corporate taxes by having a lower corporate tax rate. The question is, how would such a reduction be implemented? Wood feels that it is unlikely that such a change could be brought about by a one-line change to the tax code; more likely, it would involve comprehensive revision of the code.

Wood hopes that the onset of campaigning for the presidential election in 2016 will bring about renewed interest in a flat tax. Wood supports the idea of the simplicity of a flat tax. However, he doubts that such a plan has a chance because it is viewed as regressive.

For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.

Wrestlers File Concussion Lawsuit Against WWE: An Interview With Konstantine Kyros

Two former professional wrestlers, Vito LoGrasso, 50, and Evan Singleton, 22, have filed a potential class-action lawsuit in federal court in Philadelphia. The lawsuit resembles thousands of suits pending against the NFL in the same courthouse. The NFL litigation could yield a $1 billion settlement if a judge approves a proposed deal. The wrestling lawsuit accuses the WWE of ignoring concussions and having WWE wrestlers do dangerous stunts that caused serious brain injuries. Plaintiffs’ lawyer Konstantine Kyros explains the lawsuit in this report.

Konstantine Kyros

Konstantine Kyros

Kyros explains that the litigation came about in large part because of the NFL concussion litigation. Kyros realized that that wrestlers might be suffering from the same kinds of permanent injuries that have plagued so many professional football players. As a result, he did some investigation and outreach. One of the wrestlers he came in contact with was Billy Jack Haynes, a star of the original Wrestlemania. The result of that meeting was a lawsuit filed for Haynes in October 2014 in Oregon federal court.

The Haynes case led to the present case for LoGrasso and Singleton. Kyros says there are some clear similarities between the injuries sustained by wrestlers and those sustained by NFL players. The wrestlers have more of the repetitive head trauma than NFL players, wrestling perhaps five times per week. They have many more concussions. And, Kyros points out, the effects of the injuries get worse as people age.

Kyros says that the WWE has a concussion policy and has had various concussion policies since about 2008. However, based on the research and study Kyros has performed in preparing for and the evidence gathered for the litigation, “those policies . . .  have been completely and totally inadequate.” When these wrestlers were injured, they were just cleared to continue to wrestle.

Kyros says that the lawsuit will seek compensatory damages but will also seek medical monitoring for these men, who don’t have many other options.

Konstantine William Kyros is the managing partner of Kyros Law Group LLC. He is a pioneer in online legal services, having conducted an Internet and technology law practice since 1997. In the past 11 years, he has partnered with some of the most prominent law firms in the country, handling pharmaceutical, patent, tax, aviation, insurance, medical device, real estate, finance, SEC actions, securities, criminal defense, and asbestos litigation matters. These programs have been enormously successful for his clients, having generated millions of dollars in settlements for them and their families. The Legal Broadcast Network is a featured network of the Sequence Media Group.