If you employ 50-99 total employees – counting all full-time, part-time, and seasonal – pay attention! Your organization is known as an Applicable Large Employer, or ALE, then this article is just for you.
50 Employees is the Magic Number!
If your company has affiliates – known as “controlled groups” as defined by the IRS – you should be particularly aware. 50 is the magic number under the ACA that makes you an ALE. The Affordable Care Act requires you to count all employees of all controlled groups together to determine if you have over 50 employees. Count all full-time employees working 30 hours a week or more, part-time employees (total all part-time hours, then divide by 120 to get the full-time equivalent number per month), and seasonal employees working more than 120 days per year. Your FTE (Full-Time Equivalent) count in 2015 will be used for reporting in 2016, which is why you should already be tracking your payroll hours.
THREE Affordable Care Act (ACA) rules are set to take effect in 2016 that will affect your company:
ONE: If you have 50 – 99 FTE’s in the calendar year 2015, your company will be subject to the Employer Mandate; this means there will be a special tax penalty on large employers who do not offer minimum value, affordable health coverage to at least 95% of their full-time employees, starting with your health plan renewal date in 2016. Consult with your agent to make sure your health plan is in compliance with the ACA requirements in order to avoid having to pay a tax penalty.
TWO: Generally, you will be required to file two new tax forms, 1094-C and 1095-C, by February 28th, 2016 (or March 31st if filing electronically). Please note that self funded plans have different filing forms. Consult with your tax professional regarding what information you need to track for filing these forms next year.
THREE: Beginning with your 2016 health plan renewal, the ACA will change how your group health plan is rated. Before January 1, 2016, in Texas a group of 50 or more is rated as “large group”, using claims experience and medical information. Starting January 1, 2016, groups of 51 – 99 will now be included in the ACA definition of “small group” for rating purposes. Instead of medical underwriting, carriers must use Adjusted Community Rating to determine your renewal rates in 2016. For some groups, this could result in a large rate increase. It will also require changing your benefit design to one that is in the small group, ACA-compliant portfolio. Because of this, there will be some strategic decisions you need to make THIS YEAR. Call us to discuss a strategy for your group health plan in 2016.
Hibbs-Hallmark & Company has experienced, knowledgeable Employee Benefits Specialists ready to help with your questions. Please contact us if you need someone to help you navigate through your decisions for 2016.
Call 1-800-765-6767 and ask for an Employee Benefits Specialist!
Affordable Care Act Certified
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About Hibbs-Hallmark & Company – Hibbs-Hallmark & Company is headquartered in Tyler, Texas, and provides insurance and risk management products and services nationwide.
Contact Hibbs-Hallmark & Company – 1-800-765-6767 – Contact our Tyler, Longview, Austin, Forney, or Dallas Office.