Affordability Monitoring | Reporting | FTE Analysis
The mandate: It’s no longer enough to offer health insurance coverage to your employees. Employers insurance must now meet the new standards of minimum value and affordability. Failure to meet these standards subjects an employer to the “§4980H(b) penalty” of $250 per month (up to $3,000 per year) times the number of full-time employees who receive tax credits or cost sharing reductions through a health insurance exchange. However, this penalty, by regulation, cannot exceed the “§4980H(a) penalty” of $166.67 per month (up to $2,000 per year) for all (except for the first 30 violations — and except for the first 80 violations for calendar year 2015 only) employees.
Under the ACA (Affordable Care Act) define employer coverage as unaffordable if the required employee contribution toward the cost of self-only coverage exceeds 9.5% of the employee’s household income. It should also be noted that this relatively simple test for affordability, as promulgated under the regulations, has created some significant confusion for employers.
The Ascentis solution: The Ascentis ACA Affordability Dashboard that helps organizations determine whether or not they are in compliance with the ACA. Included as a standard feature in Ascentis HR Self-Service, the dashboard shows a month-by-month analysis of whether or not your organization is offering affordable coverage, and also allows drilling down into the details and reporting. The dashboard supports all three ACA safe harbors including the Federal Poverty Line, Box 1 W-2 Income, and the Monthly Rate of Pay. Because the Box 1 W-2 Income safe harbor requires payroll data, it will only be available for Ascentis HR clients also using Ascentis Payroll.
Reporting: Internal Revenue Code for sections §§6055/6056
The mandate: The ACA imposes some new annual reporting requirements to inform the IRS and individuals about who has access to MEC (minimum essential coverage), and when an employer shared responsibility assessment may be owed. In addition, these requirements are intended to facilitate the determination about who is eligible for premium assistance. IRC Section 6055 requires insurers, self-funded plans and other providers of MEC to report certain information to the IRS. Of particular interest to employers is the newly added IRC Section 6056 reporting requirement. This requirement obligates employers subject to the employer shared responsibility rules of the ACA, specifically employers employing 50 or more employees (known as “applicable large employer” or “ALE”), to report certain information annually to the IRS, as well as provide related benefit statements to employees.
The Ascentis solution: For Ascentis HR customers, the relevant history (changes in eligibility, dependents, and enrollments) is tracked throughout the year. Uniquely, Ascentis uses a callable, point-in-time eligibility checking engine and unlimited detailed history at both the employee, and the benefits rules table level, to be able to retroactively calculate eligibility throughout the year. Ascentis HR includes a full §§6055/6056 reporting solution including:
- Form 1094-C for each ALE (applicable large employer)
- Form 1095-C for each employee, delivered electronically through Ascentis Employee Self-Service or mailed to the employee’s home address
- Electronic filing with the IRS, regardless of the size of the organization
Full Time Equivalent / Hours Worked Analysis
The mandate: Pinpointing whether employees qualify as full-time for purposes of the ACA can be complex for employers with employees who work variable hours or seasonally, or for those with high turnover. In addition, effective for the plan year beginning Jan. 1, 2015, the ACA specifies penalties if an ALE chooses not to offer health insurance to its full-time employees or fails to meet specified coverage levels. There are very difficult calculations that employers must perform to determine if they are an ALE or not.
The Ascentis solution: Whether your time and attendance, payroll and/or HR and benefits management data today is automated, managed by spreadsheet, or maintained by multiple stacks of paper, Ascentis can help you meet the detailed new hours counting requirements of the ACA through specialized ACA reports that included as standard in both Ascentis Payroll and Ascentis Timekeeper.