The Affordable Care Act (“ACA”) Employer Mandate requires Applicable Large Employers (“ALEs”), which are employers with 50 or more full-time (FT) and full-time equivalent (FTE) employees(EEs), to offer a minimum level of affordable health insurance coverage to at least 95% of their workforce and their dependents.
In 2024, a small employer who grows and employs at least 50 FT EEs or FTEs does not immediately become an ALE subject to the Employer Mandate rules as determination is averaged over the calendar year.
As of December 31, 2024, if it is determined that the employer did meet the requirements for calendar year 2024, it becomes an ALE for calendar year 2025 as of January 1, 2025. Tracking is critical as determination before the end of 2024 whether or not they will be subject to these rules in 2025 and, if so, which employees should be offered coverage as of January 1, 2025.
Small employers who grow into ALEs are not subject to a penalty during the first three months (January through March) of the first year they are an ALE, if they comply as of April 1, 2025. The three-month period is called a “limited non-assessment period” (LNP).
Additionally, when an employer grows into an ALE, tracking offer dates are imperative, as of January 1, 2025, which full-time employees were offered coverage, which employees enrolled, and what the lowest-cost option was. This is because by early 2026,it will have to do employer information reporting for calendar year 2025 (i.e., furnish 1095-Cs to full-time employees and file 1094-Cs with the IRS).
Due to the complexities of Employer ACA reporting requirements, it is critical that employers with over 50 employees engage a professional firm, such as SPS/GZ, to assist with the coding, mailing, and e-filing of the required forms (Forms 1095-C and 1095-B) with the IRS.
SPS/GZ is a full-service tax reporting and stock plan administration firm that provides personalized service and exceptional support, utilizing state-of-the-art technology to business clients of all sizes. We create and e-file, 1099 filing services, including 1099-NEC, 1099-MISC, Forms 1042-S, 1098-T, Affordable Care Act tax forms, and Forms 3921 and 3922. Additionally, we offer complimentary TIN-Matching services to help reduce errors prior to reporting. In addition to a thorough review of client data specifically looking for penalty triggers.
Providing year-round support for our clients, including post-filing assistance and comprehensive ACA support for responses and resolutions of ACA penalties to employers and entities of all sizes and whether or not they used SPS/GZ for the initial reporting of Forms 1095-C, 1095-B, 1094-C, and 1094-B.
Our complete and affordable solution allows administrators to simply upload their tax form data file to our secure portal in a few simple steps and we handle everything else to keep your organization compliant. Contact us today at sales@greenzapato.com or call at (888)375-3049.
