Determining Employee Affordability

One of the main provisions of the Affordable Care Act is that it requires the health insurance taxpayers have to be affordable. It should go without saying, then, that the health insurance you provide as an employer must be affordable to your employees.

But, as always, the IRS is going to spell it out for us anyways.

In order to be considered “affordable” under the employer shared responsibility provisions, the employee’s share should cost no more than 9.5% of their annual household income.

Since you’re not likely to know the entire household income of all of your employees, the IRS has come up with three safe harbor techniques to determine whether or not the coverage you offer is affordable.

Keep in mind that you can choose to use one or more of the safe harbors for all of your employees, but you must do so on a consistent basis for all of your employees.

The Form W-2 Wages Safe Harbor
This form of safe harbor bases affordability on whether or not the employee’s cost of the lowest-cost, self-only coverage exceeds 9.5% of the calendar year wages reported in Box 1 on Form W-2.

The Rate of Pay Safe Harbor
The rate of pay safe harbor involves a bit more math: coverage for an hourly employee is affordable if the employee’s contribution for the calendar month does not exceed 9.5% of an amount equal to 130 hours times the lower of

• The employee’s hourly rate of pay on the first day of the coverage OR
• The employee’s lowest hourly rate of pay during the calendar month.

The Federal Poverty Line Safe Harbor
With the FPL safe harbor, for coverage to be considered affordable, the employee’s contribution cannot exceed 9.5% of the Federal Poverty Line for the calendar year divided by 12.



Once you’ve determined your employee affordability, it’s important to have a plan put in place to report that coverage to the IRS! And one of the easiest, most secure ways to do that is with ExpressACAForms! We’re a full-service, IRS-authorized e-file provider, which means we handle creating your forms and e-filing them once you’ve approved them. Give us a call today or sign up on our website to get started.

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Why You Should Be Covering Your Employees' Dependents

If you read the fine print of the Affordable Care Act (or the summary on the IRS’s website), you’ll notice it doesn’t just mention your full-time employees when talking about to whom you’re required to offer minimum essential coverage.

In order for the health insurance you offer to meet minimum value - and therefore ACA compliance - it must also extend to the dependents of your full-time employees. And under the ACA, dependents include children and adopted children, up to the age of 26.

Even if you offer health insurance to all of your full-time employees, if it fails to cover their dependents, you can still incur an ACA penalty. Not covering the dependents of your employees signals that the coverage doesn’t meet minimum essential coverage and value, a.k.a. isn’t in compliance with the ACA.

And when you aren’t compliant with the ACA, you start incurring IRS penalties, in this case, the Employer Shared Responsibility Payment.

When you sign on with ACAwise, our year-round compliance software can help you keep on track with your coverage offers. We’ll alert you to any risks that may indicate your compliance is slipping, and after creating your 1094 and 1095 Forms, we’ll run them through a series of error checks to ensure your ACA reporting is correct.

With ACAwise, there’s virtually nothing to worry about when it comes to your ACA compliance, so why not get started today? Request a demo or sign up now to get everything squared away for the upcoming ACA filing season and beyond!

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Are You Reporting Your Employee Health Coverage Plans to the IRS?

Employers with fifty or more full-time employees have had to deal with a few changes over the past few years thanks to the Affordable Care Act. Not only have you been required to offer health insurance coverage to your full-time employees, but earlier this year you had to start reporting that coverage to the IRS.

For the 2015 ACA filing period, the IRS had a bit more leniency for those reporting coverage. They extended the reporting deadlines, offered safe harbor qualifications for an easier transition, and even offered to forgive late filing penalties, depending on the circumstances.

This year, they’re a little more like the scary, impending IRS we’ve come to know and try to avoid too much contact with. ACA Forms 1094-C and 1095-C for the 2016 year will need to be turned in, correct and on time, or you’ll face some serious consequences.

So it’s incredibly important to have a plan in place for your 2016 and future ACA filing. We’re a little biased and recommend ExpressACAForms for the job! ExpressACAForms is chock full of state-of-the-art e-filing features to ensure your ACA Forms 1094 and 1095 are filled out correctly and sent to the right places at the right time.

Of course, what really sets us apart is our friendly and always available customer support team, based right here in Rock Hill, South Carolina. Give them a call or send an email to learn more about e-filing with ExpressACAForms!

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ACA Requirements for Employers

There’s a lot of information going around about the Affordable Care Act. With all the insurance and filing requirements now in place for individuals, employers, and insurance providers, it can be hard to keep up with what you need to do to keep your business compliant.

Well rest easy, you’ve found ExpressACAForms and we’ve brought you the Employer Shared Responsibilities straight from the horse’s mouth!

(This horse, of course, is the IRS.)


The Employer Shared Responsibility Provisions
So the first thing to know about employer shared responsibility is that it applies to Applicable Large Employers (ALEs), or employers with 50 or more full-time employees. So the vast majority of employers aren’t liable for these provisions, but they are:

• ALEs must offer minimum essential coverage (MEC) of affordable health insurance that provides minimum value OR
• Make an employer shared responsibility payment to the IRS.

These provisions went into play January 1, 2015, so you may be a little familiar with one or the other already.

Avoiding the Payment by Meeting the Provisions
There are two ways an ALE can be made to pay an employer shared responsibility payment:

1. If the employer does not offer MEC to at least 95% of its full-time employees and their dependents, and
2. If at least one full-time employee receives the premium tax credit for purchasing coverage through a Health Insurance Marketplace.

The reasoning behind the first way to incur a payment is a little obvious; you’re directly disobeying the ACA and IRS’s rules about providing health insurance.

The second way’s reasoning is a little more nuanced. You see, even if you offer insurance to your employees, you still have to make sure it meets all the ACA’s minimum value and affordability requirements. If it doesn’t, when your employees go to a Health Insurance Marketplace to get more coverage, they become eligible for and receive a premium tax credit. This alerts the IRS that you become eligible for and receive an employer shared responsibility payment for not meeting ACA requirements.

Employer Reporting Requirements
So not only do you as an ALE have to provide affordable health insurance that meets all these MEC and minimum value requirements, but you have to report you did all that to the IRS each year as well with Forms 1094-C and 1095-C.

Think of them as W-2s for your employees’ health insurance coverage. You use these forms to report the coverage you offered them, the coverage they accepted, and their (and their dependents) basic information. And in January each year, you send a copy to each of your employees so they can use it for their records, and in March you e-file a copy with the IRS to show your compliance.

By the way, one of the easiest, most secure, and most accurate ways to e-file these forms is right here with ExpressACAForms! And if you’re worried about staying ACA compliant throughout the year, check out our sister product ACAwise; it tracks your compliance, alerts you of any discrepancies, and e-files your return each year for you!

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What is a Health Care Marketplace?

With all this Affordable Care Act talk going around, you’ve probably heard the term “Health Care Marketplace,” or maybe even “ObamaCare Marketplace,” dropped once or twice. But just what is this mythical marketplace?

Is it an actual place where insurance salesmen hawk different insurance packages all wrapped up in paper and string? Sort of! But not exactly.

The Health Insurance Marketplace is your state’s price comparison website for subsidized health insurance. Each year during the annual open enrollment period, you can enroll in a plan, switch plans, or apply for cost assistance.

If you don’t receive insurance from your employer, the Health Insurance Marketplace is where you can go to be sure you’re getting health insurance that meets minimum essential coverage and minimum value. And those are things you want to make sure you have, otherwise, you'll have to pay a pretty hefty fine.

As we mentioned earlier, each state has a different marketplace. And you’ll want to make sure you’re on the right website for your state. If you’re in:

• Arkansas, use the Arkansas Health Connector,
• California, use Covered California,
• Colorado, use the Connect for Health Colorado site,
• Connecticut, use Access Health CT,
• District of Columbia, use the DC Health Link,
• Hawaii, use the Hawaii Health Connector,
• Idaho, use Your Health Idaho,
• Kentucky, use Kentucky’s Healthcare Connection,
• Maryland, use the Maryland Health Connection,
• Massachusetts, use the Health Connector,
• Minnesota, use MNsure,
• Nevada
• Individuals: HealthCare.gov
• Employers shopping for employee health plans: Nevada Health Link
• New Mexico, use BeWellNM,
• New York, use the New York State of Health,
• Oregon
• Individuals: HealthCare.gov
• Individuals applying for Medicaid and CHIP: Cover Oregon
• Rhode Island, use HealthSourceRI,
• Utah
• Individuals: HealthCare.gov
• Small businesses and their employees: Avenue H
• Vermont, use the Vermont Health Connect, and
• Washington, use the Washington Healthplanfinder.

If you live in any other state, you’ll use the official Health Insurance Exchange Marketplace website, www.HealthCare.gov. If you live in one of the US territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, or the Virgin Islands), you’re not eligible to use the Marketplace to apply for health insurance and should check with your territory’s government offices to learn about your options.




While our software is designed to help employers and third party providers e-file ACA returns, we’re also committed to providing accurate, up-to-date ACA information, so stay tuned for more from ExpressACAForms!

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What is Minimum Value?

Last week we went over minimum essential coverage (MEC) and how it’s important to offer coverage that meets it. Another requirement of Affordable Care Act compliant coverage is that it also meet a minimum value.

What is Minimum Value?
Minimum value is a standard of minimum coverage that applies to health plans employers offer. If the plan you offer meets this standard as well as the MEC standard, you’re considered ACA compliant in the coverage you offer.

A health plan meets the minimum value requirement if:

• It’s set up to pay at least 60% of the total cost of medical services for a standard population and
• Its benefits include substantial coverage of physician and inpatient hospital services.

Reporting Minimum Value
Don’t forget that you have to report the coverage you offer that meets MEC and minimum value requirements on Forms 1094 and 1095! And ExpressACAForms can help you e-file those forms quickly, easily, and securely!

If you’re looking for something a little more in-depth (think features to help make sure your coverage meets minimum requirements and is offered on time) in your ACA reporting, try out our sister product, ACAwise! You can sign up for a free demo today over at www.ACAwise.com or by calling (704) 954-8420.

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What is Minimum Essential Coverage?

A phrase that pops up a lot with Affordable Care Act compliance is “Minimum Essential Coverage,” MEC for short. But just what does it mean?

Minimum Essential Coverage
One of the main points of the Affordable Care Act was to make sure all taxpaying Americans have affordable health insurance that meets certain criteria. Obviously, one bit of this criteria had to be that all types of insurance offered as ACA compliant offer a certain amount of coverage.

Starting to get an idea of where this is going?

But, just to make sure everyone’s up to speed: minimum essential coverage is the type of coverage that meets at least all of the basic ACA requirements for health insurance.

Applicable Large Employers, insurance providers, and anyone else required to provide offers of coverage, must offer insurance that meets MEC or pay a fine. And, trust us, you don’t want to pay the fine.

Types of Minimum Essential Coverage
As a rule of thumb, the following types of health insurance meet minimum essential coverage:

• Employer-sponsored coverage, which includes COBRA and retiree coverage
• Coverage from the Health Insurance Marketplace/Affordable Insurance Exchange
• Medicare Part A
• Medicare Advantage plans
• Most Medicaid coverage
• Children’s Health Insurance Program (CHIP) coverage
• Certain coverage administered by the Veterans Administration
• TRICARE
• Coverage provided to Peace Corps volunteers
• Non-appropriated Fund Health Benefit Program coverage
• Refugee Medical Assistance supported by the Administration for Children and Families

If you need a plan for reporting the minimum essential coverage you offered your employees/recipients this year, check out ExpressACAForms! It’s simple, fast, and secure! If you have any questions, just give us a call at (704) 839-2270 or send us an email to support@ExpressACAForms.com.

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