The ACA is designed to reduce healthcare costs, expand coverage for the uninsured, and increase quality of care for people. The ACA can be confusing, making it difficult for many businesses to comply with the law’s requirements. In 2016, almost all businesses will be required to comply.
To avoid hefty fines, here are four things to know about the requirements so you can remain compliant and penalty free in 2016:
- Are you an Applicable Large Employer (ALE)? If so, your business is subject to ACA
requirements! To be considered an ALE, your company has to have 50+ full-time
employees and full-time equivalent employees (FT/FTE).
- Calculating your total number of employees is difficult. That’s because the ACA classifies
“full time” employment as 30 hours a week of work or more. Make sure to include both
full-time employees as well as those who work the equivalent of full-time hours.
- Your business must offer “affordable” health insurance of “minimum value” to your
“Affordable” Health Insurance is less than 9.5% of annual household income. You
can calculate the 9.5% from employees’ W2 wages, hourly pay rate, or the Federal
Poverty Level for an individual.
“Minimum Value” means employer-sponsored health plans must be designed to pay
at least 60% of the total cost of medical services.
- You need to submit three key documents to guarantee compliance. If you’re an ALE,
collected all the necessary info from your workforce, and made the necessary
calculations, then it’s time to complete the three documents required for ACA compliance:
the 1094-C, 1095-C, and the Written Statement to each employee.