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Employers: Does Your ACA Coverage Meet the Requirements?

Affordable Care Act Requirements

We assist employers & small businesses in the Greater Pittsburgh area with determining their compliance requirements for the ACA. We serve  Cranberry Twp, Ross Twp, Wexford, Warrendale, McCandless, Sewickley, West View, Franklin Park and the surrounding towns & communities in North Hills PA.

Some employers are affected, based on the size of their workforce, by the shared responsibility provisions in the Affordable Care Act. However, most employers are not affected by these provisions because the number of workers they employ falls well below the workforce size threshold.

For companies who have a sufficient number of employees to be subject to the shared responsibility provisions, there are essentially two choices: 1. Provide your full-time workers and their dependents and families with the minimum essential coverage; or 2. Send the IRS an employer shared responsibility payment. A sizeable number of employers have provided and will continue to provide their employees with minimum coverage, thereby avoiding IRS penalties.

To help you better understand concepts within this mandate, here are some key term definitions.

Affordable. The whole point of the ACA is to make healthcare affordable for everyone. If your full-time employees pay less than 9.5% of their total household income for the lowest-cost self-only coverage, this is considered affordable. Keep in mind that you won’t always be able to accurately determine an employee’s household income. If this is the case, you can judge whether or not you offered healthcare that’s “affordable” under several safe harbors based on the data you as an employer received from an employee.

Minimum essential coverage: In relation to reporting by large employers, the minimum essential coverage is healthcare coverage under a plan that’s employer-sponsored. Life insurance, vision coverage, dental plans and fixed indemnity coverage are not included.

Minimum value coverage: Minimum value is provided in an employer-sponsored plan if the plan covers a minimum of 60% of the total allowed cost of benefits that you expect to incur with the plan.

When determining if a standard-feature plan will give workers the minimum value, employers can use an HHS-developed minimum value calculator. If the plan includes features that are nonstandard, an actuarial certification must be obtained for the nonstandard features. Federal guidance explains which safe harbor plans will guarantee an employer is satisfying minimum value.

From assisting with ACA compliance to full-service accounting for small and medium-sized businesses, count on the professionals at W. Cotton Mather. Call us in Pittsburgh at (412) 931-1617.