Knowing the basics of the Affordable Care Act (ACA) to ensure compliance for 2024.
#TheACAGuy suggests that employers consider:
1. Understand Employer Mandate Requirements
· Applicable Large Employers (ALEs): Employers with 50+ full-time(FT) employees (or FT equivalents) must offer minimum essential coverage that is affordable and provides minimum value to their FT employees and dependents.
· Health coverage must meet the minimum value, and self-only coverage must be affordable based on employee wages.
2. Reporting Requirements
· Forms 1094-C and 1095-C: ALEs must file these forms with the IRS and provide them to employees detailing healthcare offerings/coverage.
· Deadlines:
February 28, 2024—Paper Filing with IRS.
March 1, 2024—Form 1095-C: Deadline to Furnish to Individuals.
April 1, 2024—Electronic Filing with IRS. (10 or more forms)
3. Tracking Employee Status
· Track employees' hours to determine FT status, defined as working 30 or more per week.
· Use monthly or look-back measurements to determine employees' FT status.
4. Affordable Coverage Calculation
· For 2024, the coverage is affordable if the employee's required contribution for the lowest-cost self-only coverage does not exceed 8.39% of their household income (adjusted annually).
· Employers can use the W-2 wages, rate of pay, or the federal poverty line safe harbors to determine affordability.
5. Minimum Value Standards
· The health plan must cover at least 60% of the total allowed cost of benefits and provide substantial coverage for inpatient hospitalization and physician services.
6. Avoiding Penalties
· Penalty A (4980H(a)): If an ALE does not offer coverage to at least 95% of its FT employees and their dependents, and at least one FT employee receives a premium tax credit, the employer may face a penalty.
· Penalty B (4980H(b)): If an ALE offers coverage but it is either unaffordable or does not provide minimum value, and at least one FT employee receives a premium tax credit, the employer may face a different penalty.
7. Recordkeeping and Documentation
· Keep detailed records of the offers of coverage, the coverage provided, and the determinations of FT status.
· Audit Preparedness: Ensure that documentation is readily available in case of an IRS audit.
8. Communication with Employees
· Clearly communicate with employees about their health coverage options, the benefits provided, and any changes to their coverage.
9. Stay Informed on Legislative Changes
· ACA requirements can change, so it's essential to stay informed about any legislative updates or changes in regulations.
10. Seek Professional Advice
· Consider consulting with legal and tax professionals specializing in ACA compliance to ensure all requirements are met and avoid potential penalties.
By reviewing and adhering to the Affordable Care Act's basic principles and requirements, employers can ensure compliance, avoid penalties, and provide valuable health coverage to their employees.
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Determining Eligibility🚀
🗓️ Date: July 18th
⏰ Time: 11 am
🎤 Speaker: Ashley Pope, COO of HRlogics
📚 Dive deep into the essentials of the Affordable Care Act (ACA) with our expert Ashley Pope! This webinar will cover:
🔍 Understanding Measurement Periods
📏 Calculating Employee Hours
👥 Determining Full-Time Status
🏥 Navigating Eligibility for Health Coverage
Gain a solid foundation in ACA compliance measurement periods and ensure your team is covered! Don't miss out on this informative session.
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🔗 Back to the Basics of ACA Resources: https://lnkd.in/gYTKd7qv
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Employee Benefits Specialist | People First Leader | Client Advocate | Health Rosetta Advisor | Doing Hard Things | Special Needs Mom | WWE Fan | kkwasniak@brightlinedealer.com
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