Complex rules exist in connection with the time frame that the employer may use as the counting period for counting employees. A special rule exists for seasonal workers. Generally, if the only reason a farming business exceeds 50 employees is because of the work of seasonal workers, the farming business will not be considered an applicable large employer as long as the period of time over which the full-time employee count exceeded 50 was 120 days or less in the year. For farmers or farming families owning more than one business, entities are aggregated for purposes of counting employees.
The employer mandate rules do not require a farming business to offer health coverage to full time employees. However, there are penalties for a farm business that is subject to the mandate that either does not offer coverage or which offers coverage that does not meet certain minimum standards. These penalties are not tax deductible. Farm businesses subject to these rules will need to file a detailed report each year to the Internal Revenue Service. Which will be used to determine the amount of any penalty.
No farming business or other type of business will be subject to any penalty for 2014 because the requirement to file this detailed report, which triggers the penalty, has been delayed until January 1, 2015. The first report will be filed by farming businesses in early 2016 in connection with the 2015 tax year.
Effective January 1, 2014, every farmer will be required to maintain "minimum essential coverage" (MEC) unless they qualify for an exemption. Among the exemptions available is an exemption for lower-income farmers with incomes low enough that a return isn't required, an exemption for hardship (defined using various grounds) and the lack of ability to obtain affordable coverage (meaning generally that the farmer would be obligated to pay more than 8% of household income for health insurance).
Source: Marc Lovell, Tax School and Department of Agricultural and Consumer Economics, University of Illinois
This is a presentation summary from the 2013 Illinois Farm Economics Summit (IFES) which occurred December 16-20, 2013 at locations across Illinois. A complete collection of presentations including PowerPoint Slides (PPT), printable summaries (PDF) and interviews are available here.