The 5 Ws of the ACA Employer Mandate: Who Needs to Comply?

The 5 Ws of the ACA Employer Mandate: Who Needs to Comply?

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The Affordable Care Act’s (ACA) employer mandate has been in effect for almost one year, but there is still a lot of confusion around ensuring companies are compliant. Known as Employer Shared Responsibility or “Play or Pay,” the mandate’s goal is to reduce the number of uninsured people in the U.S. by promoting and encouraging employer-sponsored health benefits.

However, just because your Wisconsin business is offering employee health benefit solutions, it doesn’t mean you are ACA compliant. Many employers are required to file information returns and provide statements to full-time employees about the benefit solutions being offered.

To assist in ensuring your business is compliant, we will be exploring the 5 W’s of the ACA Employer Mandate over the course of the next few weeks, answering the questions before you have to ask.

Who needs to comply with the ACA Employer Mandate?

The Affordable Care Act applies to Applicable Large Employers (ALEs), which are defined by a company with 50 or more full-time equivalent (FTE) employees. The ACA employer mandate for the current year is based on the size of your company in the year previous.

If your organization has 50 or more FTE employees in 2015, you are required to comply by offering health coverage to all full-time employees and the dependents up to age 26 and report this information on tax forms 1094-C and 1095-C in 2016.

Companies with fewer than 50 FTE employees are not required to comply with employer shared responsibility under the ACA.

Defining a Full-time Equivalent (FTE) Employee

A full-time equivalent (FTE) employee is one who works an average of 30 or more hours a week or 130 hours per calendar month. However, you must also calculate part-time employees’ hours to determine whether the ACA mandate applies to your Wisconsin business.

Check out the healthcare.gov calculator to determine how many FTE employees are within your organization.

The ACA employer mandate can be difficult to navigate, so by working with a Milwaukee insurance broker/consultant, you can ensure you are remaining compliant and following all necessary regulations.

 

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