6/19/2023 0 Comments Worktime solutions![]() These ACA requirements can become much more complicated for employers who are experiencing merger and acquisition (M&A) activity. Employers may be assessed a penalty for each employee who is not offered affordable coverage who receives a premium subsidy on the public exchange. This affordability threshold percent is adjusted for every plan year. Because the employer may not know the household income, there are three safe harbors that can be used to determine affordability. In addition, under the ACA Employer Shared Responsibility provisions (ESRP), for coverage to be deemed affordable, it must not exceed the law’s affordability threshold, which in 2023 is 9.16% of an employee’s household income. The law was intended to support the intent of the ACA legislation which is to provide access to affordable healthcare benefits to more people.Īs a core component of the employer shared responsibility provision (ESRP), applicable large employers (ALEs), defined as companies with at least 50 employees, must offer healthcare that meets minimum essential coverage (MEC) requirements to 95 percent of their full-time employees and their dependents. The employer shared responsibilities is the law that requires applicable employers to offer ACA qualified benefits to most of their full-time employees. These potential penalties can easily grow into the millions for organizations with a large workforce. The IRS and the states that require reporting and filing don’t always share the same due dates each year.Įmployers who miss deadlines or who may not be in compliance with the law can receive 4980H or IRC6721/6722 penalties from the IRS. These forms as well as Form 1094 must be filed with the IRS and in some cases with states that have an individual mandate. There are new specifications that provide some flexibility for printing of 1095-B forms. Each individual ALE must offer affordable benefits that meet minimum value to at least 95 percent of their full-time employees.Įach year, the IRS requires ALEs to furnish Form 1095-C to their employees and file with the IRS. ![]() As part of these requirements, employers need to offer benefits to employees as they become eligible under the law. Employers with at least 50 full-time employees are considered an Applicable Large Employer (ALE) and are subject to the Employee Shared Responsibility Provisions (ESRP) for the ACA.
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