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Complying with the Affordable Care Act (ACA) can sometimes seem overwhelming if you’re an employer. But it’s important to remember that compliance isn’t just about paperwork: It’s about providing employees with access to quality health care and giving them peace of mind when it comes time for them to use their benefits. Continue reading for more insights on how to comply with the ACA in 2023.
What Is It?
ACA requires most Americans to have health insurance. It was enacted in 2010, and most provisions took effect in 2014. In addition, small employers can use these credits to offset health insurance costs.
Who Must Comply With the ACA?
The monthly number of full-time equivalent employees over 12 months will determine whether you will be subject to this requirement. You must comply with the law if you have 50 or more full-time equivalent employees.
How To Comply With the Affordable Care Act
Here are the steps you should take:
Know If You’re Required to Be Compliant
To determine whether your company is subject to the ACA rules, consider two questions:
- Do you have 50 or more full-time equivalent employees (FTEs)?
- Did any of those FTEs receive a premium tax credit for health coverage through an exchange?
If yes, then you must comply with the law’s employer mandate.
To Report Coverage, Use Forms 1094 And 1095
Large employers must use applicable Forms 1094 and 1095 to report to the IRS information regarding health coverage. Visit https://blog.boomtax.com/essential-guide-form-1094-b/ for a full guide on mastering Form 1094-B.
Create An Appropriate Waiting Period
Under federal law, new employees can only be offered coverage once they’ve worked at least 60 days. So if an employee works less than 60 days in a given plan year and enrolls during the open enrollment, there will be no coverage until after their first day of work in the following year.
Watch What You Put a Dollar Limit On
The ACA allows employers to place a dollar limit on benefits for some types of coverage, such as health insurance premiums or medical expenses above a certain amount per year or lifetime maximum benefit. However, this dollar limit must be enough to cover a percentage of the total cost of health insurance premiums and medical expenses — referred to as “minimum value” — for each employee eligible for coverage under the plan.
Check How Much You Can Spend
The ACA limits how much you must pay for your share of covered medical expenses. These are called “out-of-pocket costs.” As a result, you may choose a plan with a lower premium but higher out-of-pocket costs or vice versa.
By 2023, annual out-of-pocket expenses for EHBs provided by a non-grandfathered group of health insurance plans that are in-network can be at most $9,100 for single coverage or $18,200 for family coverage.
The Affordable Care Act affects nearly every American. First, you must know the basics, like who is eligible for insurance and how to apply for coverage. You should also be aware of your rights and responsibilities as an employee. Finally, it’s important to know how to comply with the law as an employer.