Small Business Requirements for Obamacare on October 1, 2013

The health insurance marketplaces created by the Affordable Care Act (commonly known as Obamacare) will open on October 1, 2013.  Most small-business employers—those with 50 or fewer full-time employees—are not required to offer health insurance coverage under the Affordable Care Act.  Additionally, businesses with more than 50 full-time employees have gotten a reprieve from penalties if they don’t offer insurance for at least one-year. However, all companies, regardless of size, are required to notify their employees about the Obamacare health insurance marketplace.  The state and federal insurance exchanges are websites on which individuals and small businesses can shop for health plans.

Bottom line, at this time, as an employer, all you have to do is provide all of your employees with notice of the marketplace.  Although it’s not clear how the requirement will be enforced, as a recent Department of Labor notice suggests that employers will not be fined for not providing the notice (see a reference to the notice here).

The U.S. Department of Labor has posted information about the notification requirement on its website and has provided model notices that can be used both by employers who offer insurance (PDF) and by those who do not offer insurance (PDF).  Potentially, employers can draft a basic letter to employees and include the relevant notices provided by the Department of Labor.

The one- to three-page model notices can be downloaded, filled out, and printed, either for distribution in the office or for mailing to employees’ homes.  Employees who come on board after October 1, 2013, must get the notice within 14 days of their start date with the company. Although there is no requirement to prove that employees received notice, it may be a good idea to have the employees sign […]

Successor Liability Issues When Acquiring a New Business

An important due diligence practice point for individuals and companies purchasing businesses in Texas, including assets, goodwill, or actual interest in the company is successor liability for state sales taxes.  Almost all states have successor liability statutes that impose certain pre-closing state tax liabilities on the buyer of a business.  The Texas version of this concept is found in Section 111.020 of the Texas Tax Code and reads as follows:

(a) If a person who is liable for the payment of an amount under this title sells the business or the stock of goods of the business or quits the business, the successor to the seller or the seller’s assignee shall withhold an amount of the purchase price sufficient to pay the amount due until the seller provides a receipt from the comptroller showing that the amount has been paid or a certificate stating that no amount is due.

(b) The purchaser of a business or stock of goods who fails to withhold an amount of the purchase price as required by this section is liable for the amount required to be withheld to the extent of the value of the purchase price. . . .

The impact of Section 111.020 is that if a buyer acquires a “business” it can become liable to the State of Texas for up to the full amount it pays for the business (i.e., for a total outlay of double the purchase price, once to the seller and once to the State). The assumption of debt is counted in the total price paid as well as the fair market value of any assets paid in-kind.

The determination of what constitutes a “business” is very fact specific, but the Comptroller’s Rule 3.7 (d) […]