Reporting for ACA Compliance

Posted by BAS - 13 December, 2018

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Employers with 50 or more full-time/full-time equivalent employees (called Applicable Large Employers) must offer their 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.

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.

Coverage is affordable if, for plan years starting in 2019, the employee does not have to contribute more than 9.86% of his or her household income.

Applicable Large Employers must provide their full-time employees information about their offer of health coverage.  Insurers and employers of any size with a self-funded health plan must provide covered individuals individuals describing their actual coverage.

Typically, this information is provided on Form 1095-B or Form 1095-C.  

  • Form 1095-B, Health Coverage. Health insurance providers send this form to individuals they cover, with information about who was covered and when.
  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. Certain employers send this form to certain employees, with information about what coverage the employer offered. Employers that offer health coverage referred to as “self-insured coverage” send this form to individuals they cover, with information about who was covered and when.

The information reported on Form 1094-C and Form 1095-C is used in determining whether an employer is potentially liable for a payment under the employer shared responsibility provisions and the amount of the payment, if any. Form 1095-C is also used by the IRS and the employee in determining the eligibility of the employee (and the employee's family members) for the premium tax credit.

Applicable Large Employers and employers with self-funded health plans should be finalizing their data collection for 2018 to be able to provide the required information to employees and covered individuals in early 2019.

Topics: Health Care Reform (ACA)


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