ACA: What Employers Need to Know

ACA: What Employers Need to Know

by Posted on: April 13, 2015Categories: HR & Compliance   

The health care law contains tax provisions that affect employers. The size and structure of a workforce-small, or large- helps determine which part of the law apply to which employers. The number of employees an employer has during the current year determines whether it is an applicable large employer (defined below) for the following year.

  • Applicable large employers are generally those with 50 or more full-time employees or full-time equivalent employees
  • Employees with fewer than 50 full-time or full-time equivalent employees are not applicable large employers.
  • Calculating the number of employees is especially important for employers that have close to 50 employees or whose force fluctuates during the year.

Fewer than 50

SHOP Eligibility

  • Employers with fewer than 50 employees can purchase insurance through the Small Business Health Options Program

Information Reporting

  • Self-Insured Employers: All employers, regardless of size, that provide self-insured health coverage must file an annual return for individuals they cover and provide a statement to responsible individuals (generally the person who enrolls one or more individuals).
  • The first information reporting returns¬†are due to be filed (and furnished) in 2016 for the year 2015. The rule is optional for 2014.

Credits and Payments

  • Employers may be eligible for the small business health care tax credit if they:
    • cover at least 50 percent of employees’ premium costs
    • have fewer than 25 full-time equivalent employees with average annual wages of less than $50,000 and
    • purchase their coverage through the Small Business Health Options Program
  • Employers with fewer than 50 full-time employees of full-time equivalent employees are not subject tot he employer shared responsibility provisions.

50 or More

SHOP Eligibility

  • Employers with exactly 50 employees can purchase insurance through the Small Business Health Options Program

Information Reporting

  • Applicable large employers must file an annual return (and provide a statement to each full-time employee) reporting whether they offered health insurance, and if so, what insurance they offered their employees.
  • The first information reporting returns are due to be filed (and furnished) in 2016 for the year 2016. This rule is optional for 2014.

Payments

  • Applicable large employers will be subject to the employer shared responsibility provisions beginning in 2015
  • In general, an applicable large employer will be subject to a payment if the employer does not offer “affordable” coverage that provides “minimum value” to its full-time employees (and their dependents) and one or more full-time employee(s) gets a premium tax credit.

Find out  more about the tax provisions of the Affordable Care Act at IRS.gov/aca

 

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