Short Primer for Business Owners on the Affordable Care Act

As I believe the Affordable Care Act will have vast and far-reaching implications on business owners and society at large, I thought it prudent to set forth a few important points for those who may be interested in how their businesses will be impacted.

The Affordable Care Act includes requirements that impact both small and large businesses. However, its impact is primarily aimed at those businesses with 50 or more "full-time equivalent" employees. 

• Businesses that are under that threshold do not have to modify their current insurance coverage, nor must they provide coverage to those employees whom the employer does not currently insure.
• Businesses with 50 or more "full-time equivalent" employees must offer those employees health insurance or they will face a monetary penalty.
• The health insurance plan offered by covered businesses must be "affordable" - that means any share of the premium paid by the employee cannot be greater than 9 1/2 % of the amount reported on the employee's Form W-2, Box 1 (i.e. wages). This limit applies to employee-only coverage.
• The Affordable Care Act also requires that the health care plan provide at least 60% of a covered employee's anticipated costs for health care.
• "Full-time equivalent" does not simply mean "full time". A "full time" employee is one who works 30 or more hours per week, and they are covered in the definition of "full-time equivalent." However, part-time employees may also constitute "full-time equivalent" employees. Each month, their hours must be counted and then divided by 120 hours to determine how many part-time employees are covered under the Affordable Care Act. 
• Businesses that primarily utilize seasonal employees, such as landscaping companies and some retail companies, are also subject to the Affordable Care Act. However, they may be excepted from the requirement to provide health care coverage if during the year prior to the reporting year the business utilized 50 or more full time equivalent employees for less than 121 days, and the employees who resulted in the employer exceeding the 50 full-time equivalent limit were "seasonal employees" as defined by the Department of Labor.
• Business owners should expect increased scrutiny from the Internal Revenue Service with respect to part-time and seasonal employees, as there is concern that employers will attempt to avoid the requirement to provide affordable health insurance coverage that provides the value required under the Affordable Care Act.
• The start date on which covered businesses must provide health care coverage in accordance with the Affordable Care Act was originally January 1, 2014. However, the start date has been postponed and rescheduled for January 1, 2015. This extension did not alter the October 1, 2013 deadline by which employees of businesses with more than $500,000 in annual business were to be provided written notice of state health insurance exchanges.

The rescheduled start date provides you the opportunity to evaluate your obligations under the Affordable Care Act, and to plan accordingly. Do not waste that opportunity.

Brief Overview of Ohio Gun Laws

In the wake of the current political and legal climate, gun laws have been at the forefront of discussions around the country. For those of you in Ohio, here is a short primer on the laws governing firearms in the Buckeye State.

Open Carry

Generally, neither a permit nor license is needed to openly (versus concealed) carry a firearm in public. Additionally, Ohio currently does not have any type of restrictive ban on firearms (other than Title II Firearms and magazines with a capacity in excess of 31 rounds), and does not require a waiting period to purchase a firearm. (Conversely, California imposes a 10-day waiting period). There is no statewide registration of gun ownership.

There are restrictions about how a firearm can be transported in a vehicle. Generally, the firearm must be unloaded and enclosed in a container in the vehicle. Additionally, separate the ammunition from the firearm. These restrictions do not apply to concealed carry permit holders.

In Ohio, municipal and county governments are prohibited from enacting gun laws that impose greater restrictions on gun rights than the state law restrictions.

Concealed Carry

Ohio permits individuals to carry firearms in a concealed manner, so long as a permit is obtained. The Buckeye State is a “shall-issue” state – the Sheriff is must issue a concealed carry permit to all applicants who qualify. A qualified applicant is an individual who

• Is at least 21 years old;
• Has been an Ohio resident for at least 45 days;
• Has been a resident of the county in which they apply, or an adjacent county for at least 30 days;
• Completes an exam to demonstrate they are competent with a firearm; and
• Pass a background check.

In extreme situations, temporary emergency permits can be issued.

Currently, Ohio has reciprocity agreements with respect to concealed carry permits with the following states: Alaska, Arizona, Arkansas, Delaware, Florida, Idaho, Kansas, Kentucky, Louisiana, Michigan, Missouri, New Mexico, North Carolina, North Dakota, Nebraska, Oklahoma, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia and Wyoming.

Restrictions

Ohio prohibits carrying a firearm (regardless of whether you have a concealed carry permit) in the following areas:

• Law enforcement facilities
• Detention facilities
• Airports
• Institutions for caring for the mentally ill
• Courthouses
• Churches
• Child daycare centers
• Schools and universities
• Most places that sell alcohol for on-premises consumption (there is an exception for concealed carry permit holders who are not consuming alcohol)
• Businesses that post a sign banning weapons

Castle Doctrine

In 2008, Ohio enacted a self-defense law based on the castle doctrine. Under Ohio law, you may “stand-your-ground” in your home or vehicle – you may use deadly force within your homes or vehicles without a duty to retreat if you are confronted by a person illegally entering the home or vehicle.  

Previous to 2008, the victim of a home invasion in Ohio was required to retreat before using deadly force against an intruder, and one who used deadly force in such a situation had to prove they acted out of fear of serious physical injury or death. The law now creates a presumption that you acted in self-defense or in defense of another in those situations (if you were charged, a prosecutor would have to prove the intruder did not enter your home or vehicle with the intent of causing harm).  This law also bars criminal offenders from recovering civil damages for injuries they incur while engaging in criminal conduct.

Limited Liability Company (LLC) as Asset Protection Device

So your Ohio Limited Liability Company has been properly established, you are not commingling funds or assets, and business is going well, when disaster strikes and your find yourself on the wrong side of a lawsuit (i.e. a defendant). The situation goes from bad to worse when you lose the lawsuit and a judgment is entered against you (perhaps you ignored the summons and did not respond within the time required, or the facts were not in your favor). Before long, the winning party, now a creditor, is attempting to collect on that judgment and you are attempting to figure out the extent of your financial exposure and if your company is at risk.

Let's assume that you took the necessary steps to ensure that your limited liability company is a distinct and separate entity from you as an individual (Check out these previous posts: http://generallygoodadvice.blogspot.com/2012/08/does-your-llc-really-limit-your.html; and http://generallygoodadvice.blogspot.com/2012/10/commingle-funds-and-your-liability.html). In Ohio, Code Section 1705.19 provides that a "charging order" is the sole and exclusive remedy that a judgment creditor may seek to satisfy a judgment against the membership interest of a member. This applies equally to a single-member limited liability company and one with multiple members. That means the creditor cannot take control over the LLC's assets, and the creditor cannot demand a distribution. Rather, the creditor must apply to the court for a charging order and then is limited to LLC distributions, if they are made (practically speaking distributions will likely be made at some point). Depending upon the amount of the judgment and the details regarding your limited liability company (profits, leveraged assets, etc), a creditor may be reluctant to expend the time, legal resources and money to pursue the charging order. 

The obvious questions are:

1. Have you properly established your Limited Liability Company in Ohio (or multiple LLC's in many circumstances)?
2. Have you properly transferred the necessary assets to your LLC?
3. Once the assets are transferred, have you taken additional steps to minimize their exposure and increase the protection of those assets?

And most importantly, if and when you receive a summons (or any legal document for that matter), contact a lawyer immediately to discuss your rights and any exposure you or your company may have. 

At Hallowes & Ebbeskotte, LLC, our Ohio business law attorneys are well versed in evaluating and providing guidance to business owners. If you have questions about your business, or would like us to review the structure of your limited liability company and establish an asset protection plan for you, contact me at josh@thehelawfirm.com or (614) 759-4603. Also, feel free to subscribe to this blog moving forward so I can keep you up to date and informed.