Employers with over 50 employees
ACA Mandate & Penalties
If you have Employees working over 30 hours/week Notice 2011-36 2012-01 this would include Part Timers as there is a formula called FTE Full Time Equivalents there is a requirement under Health Care Reform to purchase Health Insurance coverage for their employees or pay penalties of $2k/employee.
Covered CA will send letters to employers who have employees getting subsidies to warn them… https://insuremekevin.com/covered-california-demands-employer-information-for-health-insurance-subsidy/
As of November 2017, employers started being penalized by the IRS for failing to comply with the ACA’s Employer Mandate. Under the Employer Mandate, Applicable Large Employers (ALEs), organizations with 50 or more full-time employees and full-time equivalent employees, are required to offer Minimum Essential Coverage to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value and is affordable for the employee or be subject to IRS 4980H penalties. Scroll down for more details.
The focus of these initial Letter 226J penalty notices was ACA compliance for the 2015 reporting year. However, the IRS is now laying the groundwork to issue Letter 226J notices for future years, with an anticipated greater focus and significantly higher penalties while the agency continues to issue Letter 226J notices for 2015.
As adjustments to the ACA continue, make sure your organization is in compliance with the law. It is not going away and penalties are still being issued by the IRS. https://acatimes.com/the-affordable-care-act-and-why-you-cant-afford-to-ignore-it-update
“full-time employee” means,
with respect to any month, an employee who is employed on average at least 30 hours of service per week. 26 USC § 4980H Compare with the definition of employee – under California AB 1083 to comply with Health Care Reform.
Can you make them 1099 independent contractors and not employees?
FAQ’s, Resources & Links
Moulder Law Relief, Confusion Associated with §4980H(a) Transition Relief
On Feb. 10, 2014, the IRS and Treasury issued final regulations on the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code. More information is available on the employer shared responsibility page. The following questions and answers provide helpful information about the guidance:
- Basics of the Employer Shared Responsibility Provisions: Questions 1-3
- Which Employers are Subject to the Employer Shared Responsibility Provisions: Questions 4-14
- Identification of Full-Time Employees: Questions 15-17
- Liability for the Employer Shared Responsibility Payment: Questions 18-23
- Calculation of the Employer Shared Responsibility Payment:Questions 24-26
- Making an Employer Shared Responsibility Payment: Questions 27-28
- Transition Relief: Questions 29-39
- Basics for Small Employers: Questions 40-42
- Related Provisions: Questions 43-47
- Additional Information: Questions 48-56
On April 7, 2017 TIGTA issued its, “Assessment of the Efforts to Implement the Employer Mandate under the Affordable Care Act.” In this report, TIGT explained that the IRS has developed an ACA Compliance Validation (ACV) System. It will be used to identify potentially non-compliant Applicable Large Employers and calculate the “A” penalty under the Employer Mandate. The IRS has been developing the ACV system since July 2015 with a scheduled completion date of January 2017. However, “the implementation of the ACV System has been delayed to May 2017.”
The report states that once the systems are in place, the IRS will be able to mass identify noncompliant employers. This will allow the IRS to send notices to noncompliant employers for any and all reporting years.
This means that time is up for employers who were delaying. The current lack of IRS notices for noncompliance with the Employer Mandate does not imply that the IRS does not intend to enforce the Employer Mandate. The IRS will come knocking, they are just running behind schedule. freedom care benefits.com
See our page on the penalty for not providing MEC – $2k/employee!
Determine if you are an
Major Features of Employer Mandate for
Applicable Large Employers
Some of the provisions of the Affordable Care Act only affect your organization if it’s an applicable large employer. An ALE is generally one with 50 or more full-time employees, including full-time equivalent employees. The vast majority of employers will fall below the ALE threshold number of employees and, therefore, will not be subject to the employer shared responsibility provisions. If you are an ALE, here are five things to know:
- Applicable large employers have annual reporting responsibilities. You will need to provide the IRS and employees information returns concerning whether and what health insurance you offered to your full-time employees.
- If you’re an applicable large employer that provides self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover.
- ALEs must either offer minimum essential coverage that is affordable and that provides minimum value to their full-time employees and their dependents, or potentially make an employer shared responsibility payment to the IRS. Learn more about the employer shared responsibility provision.
- You may be required to report the value of the health insurance coverage you provided to each employee on their Form W-2.
- If you’re an applicable large employer with exactly 50 employees, you can purchase affordable insurance through the Small Business Health Options Program (SHOP).
For more information, see the Affordable Care Act Tax Provisions for Employers
Six Things to Know about the Employer Shared Responsibility Provisions
The health care law includes the employer shared responsibility provisions, which require applicable large employers to offer health coverage to full-time employees and their dependents. Those that do not offer coverage might be subject to the employer shared responsibility payment.
Here are six facts about these provisions.
- These provisions apply to applicable large employers, which includes tax-exempt and federal, state, local and Indian tribal government employers. You’re an applicable large employer if you have 50 or more full-time employees, including full-time equivalents.
- If you have fewer than 50 full-time employees, including full-time equivalents, you are not an applicable large employer and are generally not subject to these provisions. However, you are subject to the rules for large employers if you have fewer than 50 employees, but are a member of an ownership group that has 50 or more full-time equivalent employees,
- Under certain conditions relating to the employer’s maintenance of workforce and pre-existing health coverage, an employer won’t be assessed a payment for 2015. This transition relief is available for tax year 2015 for certain ALEs who have fewer than 100 full-time employees, including full-time equivalents. .
- You are subject to the payment if any employee receives the premium tax credit and any one these conditions apply. Your organization:
failed to offer coverage to full-time employees and their dependents
offered coverage that was not affordable
offered coverage that did not provide a minimum level of coverage
- You do not report or include an employer shared responsibility payment with any information return you file.
- The IRS will contact you about your potential shared responsibility payment amount. You’ll have an opportunity to respond before the IRS assesses any liability or issues a notice and demand for payment.
Arthur Gallagher FAQ‘s pdf 159 pages
What is Common Ownership – Affiliated Companies – Controlled Groups? What about leased employees?
They are employees of the leasing company and MUST be covered by the leasing company. law.com
Related & Child Pages inSection
Final Regulations 2.9.2015 Forms 1094 & 1095
- §4980H – Shared responsibility Employer Mandate text of law
- 6056 Reporting
- Mandate – Employee Definition?
- Penalties – Not Providing Minimum Essential Coverage
- zHistorical Info Employer Mandate –