Now that employers have completed their 2017 Affordable Care Act reporting obligations, they should turn their attention to 2018 ACA compliance. Applicable Large Employers must continue to offer affordable health coverage to their full-time employees or face tax penalties.
An Applicable Large Employer (ALE) is a single employer or a group of employers that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year. A full-time employee is a common law employee who works 30 or more hours per week (130 or more hours per month). An “hour” is one for which the employee is paid or entitle to payment for the performance of services, including vacation days.
An ALE must offer its full-time employees affordable minimum essential health coverage that provides minimum value. Minimum essential coverage (MEC) is any “eligible employer-sponsored plan” offered by an employer to an employee that is (1) a governmental plan, or (2) any other plan or coverage offered in a state’s small or large group market.
Coverage is affordable if, for plan years starting in 2018, the employee does not have to contribute more than 9.56 percent of his or her household income.
A plan provides minimum value if the plan pays at least 60% of the costs of benefits for a standard population.
Employers should continue be tracking employee hours to determine their full-time employee population. Employers should also review their plan offerings to confirm that they comply with Affordable Care Act requirements.
