Under the ACA Employer Mandate, Applicable Large Employers (ALE), defined as companies with 50 or more full-time employees, and/or full-time equivalents (FTEs), are required to offer health insurance that is affordable and provides minimum value to 95% of their full-time employees and their children up to the end of the month in which they turn age 26.
Affordable Coverage: “affordable” means that an employee’s contribution for employee-only coverage does not exceed a certain percentage of the employee’s household income (9.83% in 2021).
Minimum Value: a plan provides “minimum value” if it pays at least 60% of the cost of covered services (deductibles, copays, and coinsurance).
The ACA is complex and businesses that fail to comply with this mandate are subject to penalties defined by the IRS. According to the Congressional Budget Office, the IRS could collect more than $200 billion from liable ALEs over the next decade.
For groups to prove they are compliant, they have to file 1094-C and 1095-C forms with the IRS for every employee that qualifies for health insurance. Filing all this paperwork is cumbersome and time-consuming, and human error is punished with IRS fees. ACA compliance solutions are designed to help employers streamline the ACA reporting process, reduce manual workload, and keep groups compliant. Our solution allows groups to:
- Calculate ALE status: determine if they are required to prove they are ACA compliant to the IRS
- Track variable hour employees: identify how many of their employees were required to receive affordable, minimum value coverage
- Measure affordability: prove that their coverage met minimum value and was affordable
- Generate the necessary forms: generate the appropriate forms the IRS requires
- Deliver or e-file the required forms: submit and deliver the required forms to employees and the IRS
ACA compliance is complicated due to its many moving parts. However, having the reporting, filing, tracking, and risk management pieces all in one dashboard is efficient and convenient. Count on us to assist you with this important reporting process.