If a company uses a payroll processor to determine that an employee's health care costs are under the 9.5% of total income cutoff and this proves to be inaccurate, who is liable for the penalty fees?
Randy Spicer of the National Restaurant Association mentions that in most cases, a contract with a payroll company should allow reimbursement, though the ultimate responsibility for the fees will fall on the restaurant operator.
When determining eligibility for 2014, end result figures will come at the end of the year, so there is no way that an employee can demonstrate they have spent more than 9.5% of their total income until the year's end, so no penalties will be assessed.
A general rule of thumb should be to deal in good faith and attempt to make coverage affordable.
Employers aren't required to charge the 9.5% of the salary cutoff, and in many cases you may not come close to approaching this limit when still providing affordable coverage, said Jean Hagen, director of restaurant operations at Krost, Baumgarten, Kniss and Guerrero. It's best to look at the lowest-paid full-time position the company has, and use that employee as a benchmark for how you will set your coverage. It only takes one eligible employee going to a health exchange to accrue penalties, so it's best to use this individual as the jumping off point to determine company-wide cost structure.
Attorney Alden Parker added that a solidly worded contract with any payroll processor is best. If fees are assessed, the government will first collect the money from the restaurant operation, leaving the company with the responsibility of receiving reimbursement later.