ACA Filings for Applicable Large Employers
The ACA requires health plans and policies to meet specific coverage, eligibility, and cost-sharing requirements. The ACA may also subject employers to penalties if they do not offer their full-time employees healthcare coverage that is affordable and that offers minimum essential coverage. Get more info here.
The ACA requires Applicable Large Employers (ALEs) to file informational returns about their employer-sponsored health insurance offerings each year. Employers must determine their ALE status each calendar year based on the average size of their workforce during the prior year. Employers that had at least 50 full-time employees, including full-time equivalent employees, on average last year (2022) are most likely an ALE for the current year. For help determining your ALE status, visit this IRS page.
Employee contributions to an employee group health insurance policy
In order to make an offer of coverage and avoid employer mandate penalties, the offer must be affordable. For plan years beginning after January 1, 2023, healthcare coverage will not be considered affordable if an employee is required to contribute more than 9.83% of the employee’s household income.
ACA reporting at tax time
Companies that are ALEs have to report their employer-sponsored health insurance offerings to the IRS by filing Forms 1094-C and 1095-C. An ALE must also provide employees with a Form 1095-C by January 31st of the next year that details any coverage that an employee was offered during the previous year and whether or not they were covered for each eligible month. Both of these forms are filed with the IRS to show the company is in compliance with the ACA.
If you are an ALE, please let us know your status in your Company Settings, and we will file on your behalf. If you are an ALE and joined Justworks mid-year 2023, we will need to collect some additional 2023 health insurance information from you. If you aren’t sure whether your company is an ALE, you should check with your legal counsel.
If you are not an ALE, you don’t have to worry about ACA reporting. Your insurance carrier will be filing 1095-B forms with the IRS for your employees. Your employees will receive copies directly from your insurance carrier with information about their coverage that they can keep for their records, and there’s nothing you need to do.
This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.