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Affordable Care Act Resolutions for 2015

Tuesday January 27th, 2015

Estimated time to read: 1 minute, 30 seconds

Resolutions abound on January 1 each year only to be broken or forgotten in a matter of weeks or months.  Since March 23, 2010, employers have continually resolved to keep up with the changes and stay in compliance. The Affordable Care Act (ACA) resolutions for 2015 will be harmful for the weary employer who does not execute properly.

Almost 90 various provisions have become effective and many employers are still scrambling to get caught up.  While it’s important to recognize what’s behind that may still need done, it’s necessary to keep trudging ahead with new requirements.  Let’s set two ACA resolutions for 2015.  That doesn’t seem too difficult, does it?  Just two. 

1.      Employer mandate

The employer mandate requires all applicable large employers (ALE) to offer minimum essential coverage (MEC) that is both affordable (9.5% of W-2 income) and provides minimum value (policy pays 60% of the costs) or face a penalty called the assessable payment.  This coverage must be offered to all full-time (FT) employees.  FT status here is not just defined by job descriptions, but by total hours of service.  To determine this, employers can either use a monthly or measurement period and establish a stability period.  An FT employee (determined date of hire) must be eligible for benefits no later than by the 91st day.  The employer mandate applies to ALEs of 100 or more in 2015 and 50 or more in 2016.  ALEs must consider the controlled group in determining their compliance.  There is some transition relief for plans that are not calendar year.  These plans might avoid the penalty until their renewal.

2.      Applicable large employer reporting

Applicable large employer reporting (Section 6055 and Section 6056) is due to the employees by January 31, 2016, and to the IRS by no later than March 31, 2016.  However, the data collection begins January 1, 2015, for Forms 1094 and 1095.  This data collection and reporting applies to the ALE of 50 FT or more regardless of their compliance date with the employer mandate.  Required data collection includes FEINs within a controlled group, total employees, total FT employees, total months covered, whether MEC was offered, whether MEC is affordable and meets MV, employee information including Social Security Numbers or birthdates.

These two Affordable Care Act resolutions start your new year in a compliant manner.  These resolutions might not provide the same health benefit as a gym membership or eating healthier, but they will help the employer avoid a big headache and potential penalties.