ACA Reporting Requirements: What does it all mean?

The Affordable Care Act is in full motion and employers are already preparing for the changes to come next year. Starting in early 2016, employers subject to the employer shared responsibility (ESR) provisions will have to file complex information reporting forms to stay compliant. Many employers will need close coordination of their payroll, human resources and benefits departments to work seamlessly and collect all of the necessary information for the forms.

ESR’s do have some responsibilities to tend to in 2015. If an applicable large employer (ALE) had at least 100 full-time employees in 2014, the company is liable for an ESR payment in the following situations:

  • The employer does not offer health coverage or offers coverage to fewer than 70% of its full-time employees and at least one of the full-time employees receives a premium tax credit to help pay for coverage on a marketplace. A company liable under this code must make an ESR payment each month equal to the number of full-time employees multiplied by 1/12 of $2,000.
  • The employer offers health coverage to at least 70% of its full-time employees but at least one full-time employee receives a premium tax credit to help pay for coverage on a marketplace. In this instance, ESR payment equals the number of full-time employees who receive a premium tax credit for that month multiplied by 1/12 of $3,000.
  • After 2015, the above mentioned percentages will rise from 70% to 95%.

ALE’s that employed at least 50 but fewer than 100 full-time employees on average during 2014 will not be liable for the ESR penalty. This relief applies to any calendar month during the 2015 plan year.

As with any new legislation, there are penalties and provisions that can affect how these forms are filled out. For employers that are self-insured, additional data elements that must be provided may be especially difficult to track. More detailed information can be found here.

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