The Internal Revenue Service has issued a reminder to employers about specific
"shared responsibility” provisions of the Affordable Care Act that may affect them.
The size and structure of a company’s workforce – whether it is small, large, or part of a group – helps determine what provisions applies to the employer. Those with 50 or more full-time equivalent employees must file an annual information return reporting whether and what health insurance the company offered employees.
In addition, they are subject to the Employer Shared Responsibility provisions. All employers that are applicable large employers are subject to the Employer Shared Responsibility provisions, including government employers.
An employer’s size is determined by the number of its employees. Subject to certain employer aggregation rules, if an employer has 50 or more full-time or full-time equivalent employees, it will generally be considered a large employer. For purposes of this provision, a full-time employee is an individual employed on average at least 30 hours of service per week.
Under the Employer Shared Responsibility provisions, if an applicable large employer does not offer affordable health coverage that provides a minimum level of coverage to their full-time employees and does not offer minimum essential coverage to their dependents, the employer may be subject to an Employer Shared Responsibility payment.
The employer must make this payment if at least one of its full-time employees receives a premium tax credit, or subsidy, for purchasing individual coverage through the Health Insurance Marketplace.
The Employer Shared Responsibility provisions became effective at the beginning of calendar 2015. To determine if a company is an “applicable large employer” for 2015, the firm should use information about the number of employees they have and those employees’ hours of service during 2014.
A self-insured employer – that is, an employer who sponsors self-insured group health plans – is subject to the information reporting requirements for providers of minimum essential coverage, whether or not the firm is an applicable large employer under the employer shared responsibility provisions.
Information about transition relief available for employers related to the shared responsibility provision is at IRS.gov/aca.