The Affordable Care Act – How it STILL Affects Large Businesses

With the recent defeat of healthcare reform in the US Senate, it is important to remember that businesses are still bound by the rules and regulations of the Affordable Care Act. We will be reviewing the basics of how the ACA affects small businesses, large corporations, and individuals. 

 

More than 50 employees? Here’s how the Affordable Care Act affects you.

Some of the provisions of the Affordable Care Act (ACA) apply only to large employers, which are generally those with 50 or more full-time equivalent employees. These employers are considered applicable large employers (ALEs) – and are subject to the employer shared responsibility provisions and the annual employer information return provisions of the ACA. For example, in 2016 applicable large employers will have annual reporting responsibilities concerning whether and what health insurance they offered in 2015 to their full-time employees.

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

Since 2015, businesses with 50 full-time employees (or a combination of full-time and part-time employees that is equivalent to 50 full-time employees) have been subject to the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code (added to the Code by the Affordable Care Act).

Under the Employer Shared Responsibility provisions, if these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees, the employer may be subject to an Employer Shared Responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the Insurance Exchanges.

Employers with more than 50 employees cannot purchase health insurance coverage for its employees through the Small Business Health Options Program – better known as the SHOP Marketplace. However, employers that have exactly 50 employees can purchase coverage for their employees through the SHOP.

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.

Need help making sure you are compliant? Contact our tax and employment experts at Carpenter, Evert and Associates.

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