Employers with more than 50, but fewer than 100, full-time employees during 2014 didn’t have to comply with the Affordable Care Act’s (ACA) play-or-pay provisions this year, although they must still file Forms 1095-C and 1094-C. This transition relief ends Dec. 31, 2015. Beginning with the 2016 plan year (next month for calendar year plans), these employers are fully covered under the law. Ensure that these critical actions have been taken before the end of the month. If you’re missing an action item, do it now.
Review test results. Only full-time employees need to be offered affordable group health benefits that provide minimum value. To test whether employees worked at least 30 hours a week during 2015, apply the lookback/stability safe harbor or the monthly measurement safe harbor. Employees who didn’t work 30 hours a week, temporary employees and new full-time employees during their first three months on the job need not be offered benefits next year.
Track offers of coverage. As long as full-time employees receive an offer of coverage, you’re off the hook for a free-rider penalty.
What’s an offer of coverage: You make an offer of coverage if you provide employees with an effective opportunity to enroll or to decline to enroll in the plan at least once per plan year. You make an offer of coverage if employees continue their elections from a prior year.
Key: Retain all offers of coverage, especially from full-time employees who turn down your offer.
Added benefit: You will have proof that you made an offer of coverage, and you won’t be on the hook for a free-rider penalty, if the exchanges notify you that an employee bought an individual health policy and qualified for a premium tax credit.
Collect your data. It’s always easier to accumulate information than it is to go back and reassemble it. You need to accumulate the following information about employees’ health benefit choices by month, since you must report it by month on Form 1095-C: employees’ share of the premium for the lowest cost self-only plan, the months employees were actually enrolled in the plan and the months you met an affordability safe harbor or whether other relief applies to employees (e.g., a new employee is in a limited nonassessement period).