ACA: Transition Relief for Employers 2015
The ACA requires that employers with 50 or more full time employees (including full time equivalent employees) must offer affordable, minimum value health insurance coverage to at least 95% of its employees. Employers who do not may be responsible for a shared responsibility payment should one or more employees receive a premium tax credit. Affordable coverage is considered to meet one of three safe harbors: employee pay rate at the beginning of the covered year, or single coverage that costs less than 9.5% of the employee’s W2 wages, or the employee contribution does not exceed 9.5% of the federal poverty line for a single person for that year.
Minimum coverage is considered to cover at least 60% of the total allowed cost of benefits allowed under the plan. An IRS/HHS calculator can be used to determine whether a plan meets minimum value. Another term for minimum coverage is “Bronze level.”
In 2015, the IRS expects to combine reporting from employers from Forms 1095-C, 1095-B, and 1094-B, with employees claiming premium tax credits and calculate any fees owed by employers. The IRS has indicated that it will contact employers if penalties are owed, and that the employer may respond prior to penalty assessment.
Questions about the Affordable Care Act (ACA) may be directed to the MEA Employers’ Hotline.