Even with the changes in this pandemic world, employer responsibilities under the Affordable Care Act move forward. All employers should be paying attention to ACA compliance in 2020.
An Applicable Large Employer (ALE) must offer affordable coverage providing minimum value to full-time employees and report coverage and offers of coverage. An 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 entitled 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.
A plan provides minimum value if the plan pays at least 60% of the costs of benefits for a standard population and coverage is affordable if, for plan years starting in 2020, the employee does not have to contribute more than 9.78% of his or her household income.
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.
