ACA Tips for Employers With Fewer Than 50 Employees

Employer Benefits

The Internal Revenue Service (IRS) is reminding small employers about key provisions of the Affordable Care Act (ACA) which may or may not apply to them:

1. “Pay or Play” Provisions Do Not Apply

If an employer has fewer than 50 full-time employees, including full-time equivalent employees (FTEs), on average during the prior year, the employer is not considered an applicable large employer (ALE) for the current calendar year and is therefore not subject to the ACA’s employer shared responsibility provisions for the current year. Calculating the number of employees is especially important for employers that have close to 50 employees or whose workforce fluctuates throughout the year.

2. Information Reporting Requirements May Apply

Employers that provide self-insured health coverage (regardless of size) must file an information return reporting certain information for individuals they cover. These employers should have provided the 2015 Forms 1095-B to their employees by March 31, 2016. The deadline for sending Forms 1094-B and 1095-B to the IRS is May 31, 2016 (or June 30, 2016 if filing electronically).

3. Small Business Health Options Program May Be Available

Employers with 50 or fewer employees can purchase health insurance coverage for their employees through the Small Business Health Options Program–better known as the SHOP Marketplace–if they meet certain eligibility requirements. Preservation Benefit Solutions is able to assist employers throughout the application process as well as provide insights on allowing multiple plans to be available.

4. Small Business Health Care Tax Credit May Be Available

Employers that have fewer than 25 full-time equivalent employees with average annual wages of less than $51,800 for tax year 2016 may be eligible for the small business health care tax credit if they cover at least 50% of their full-time employees’ premium costs and generally if they purchase coverage through the SHOP Marketplace.

Visit the IRS webpage on Determining if an Employer is an Applicable Large Employer for more information related to employer size.

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