IRS: Find out how ACA Affects Employers with Fewer than 50 Employees

IRS: Find out how ACA Affects Employers with Fewer than 50 Employees

This email was received from the IRS on 5/13/15 (IRS.gov). We have also posted a few articles covering this same information. The below email from the IRS contains several links to excellent information, which we have highlighted for ease of use.

IRS Health Care Tax Tip Article: Find out how ACA affects Employers with fewer than 50 Employees

IRS Logo_2015Most employers have fewer than 50 full-time employees or full-time equivalent employees and are therefore not subject to the Affordable Care Act’s employer shared responsibility provision.

If an employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is not an ALE for the current calendar year.  Therefore, the employer is not subject to the employer shared responsibility provisions or the employer information reporting provisions for the current year. Employers with 50 or fewer employees can purchase health insurance coverage for its employees through the Small Business Health Options Program – better known as the SHOP Marketplace.

Calculating the number of employees is especially important for employers that have close to 50 employees or whose workforce fluctuates throughout the year. To determine its workforce size for a year an employer adds its total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each calendar month of the prior calendar year, and divides that total number by 12.

Employers that have fewer than 25 full-time equivalent employees with average annual wages of less than $50,000 may be eligible for the small business health care tax credit if they cover at least 50 percent of their full-time employees’ premium costs and generally, after 2013, if they purchase coverage through the SHOP.

All employers, regardless of size, that provide self-insured health coverage must file an annual information return reporting certain information for individuals they cover. The first returns are due to be filed in 2016 for coverage provided during 2015.

For more information, visit our Determining if an Employer is an Applicable Large Employer page on IRS.gov/aca.

Employers with More than 100 Employees

We came across this great article from SHRM on how the ACA affects reporting for large employers (100+ employees).

Survey: Employers Likely to Outsource ACA Reporting

“Affordable Care Act (ACA) reporting requirements are presenting challenges to employers, leading many to consider an outsourced solution, according to survey findings reported in April 2015 by consultancy PricewaterhouseCoopers (PwC) in An HR Perspective: Affordable Care Act Reporting Survey Results.”

The PwC survey summary goes on to state, “This reporting, on IRS Forms 1094 and 1095, is needed to demonstrate compliance with the ACA’s employer mandate and individual health coverage requirements,” the PwC report explains. “The effort required to implement the reporting can be significant, and if employers do not implement a solution soon for meeting these requirements, they may have significant risk for reporting penalties and underlying ACA excise taxes.”

Do you have a plan in place for 2015 ACA reporting requirements?

Per the aforementioned survey, only 10% of survey respondents had implemented an in-house or outsourced solution as of Q1 2015.

FosterThomas Employee Benefits Experts Can Help

FosterThomas blog articles on how the ACA affects Small and Large Employers (Click on any of the following titles for more information, including additional quick links, FAQs and more):

Health Care Reform and HR Compliance from FosterThomas

A Reliable HR Expert Providing Proactive Employee Benefits Advice for Your Organization

Since 1993, FosterThomas has delivered cost-effective, proactive, custom employee benefits solutions. We address them through the design and delivery of the perfectly loaded benefits package that will help you attract and retain employees, while implementing alternative wellness & risk management ideas to contain health care costs. Let’s talk.

EMPLOYEE BENEFITS HELP HEALTH CARE REFORM SELF-FUNDING ALTERNATIVES
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About the Author

FosterThomas is a leading professional services company that provides solutions in the areas of Human Resources Consulting and Outsourcing, HR Staffing, Outsourced Recruiting, Employee Benefits Brokerage, Payroll Implementation and Services, HR for Government Contractors, Business Insurance, HR Compliance and Risk Management. We help organizations by providing solutions designed with a focus on cost containment strategies and increasing HR efficiency. FosterThomas HR Consulting was established in 1993 with offices in Annapolis, Maryland (Corporate), McLean, Virginia and Raleigh, North Carolina. Today, FosterThomas occupies a unique position as a full service provider of HR services.

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