10 Most-Asked Questions about the ACA

1. How does the ACA affect my business?

This is by far the most common question we hear and most complicated to answer. The reality is that it affects companies differently dependent on a number of factors. Your first step in answering this question should be completing a basic impact analysis, which will determine the answer to threshold questions such as whether you are considered a large employer under the ACA, and whether you are eligible for “transition relief.” This will help you identify how the ACA will affect your specific business.

2. Am I now required to offer health insurance to my employees?

To answer this question you first need to identify if your company is subject to the employer mandate or “play or pay” rules. This will determine if you are subject to penalties should you choose not to offer coverage. It is never required that you offer coverage, but there could be financial consequences in the form of penalties if you choose not to.

3. How do I avoid penalties as an employer?

There are multiple strategies to avoid penalties that may be considered. Depending on the dynamics of your workforce, you may need to consider safe harbors for managing variable hour employees, contribution strategies to maximize affordability, or workforce changes such as utilizing more part time workers.

4. Are my employees better off getting individual coverage through an ACA exchange?

It is possible but answering this question requires analysis and careful consideration of the consequences. You may find that the answer is different for different employees. You also need to consider penalties which could apply for the employer as well as the tax treatment of individual versus group health insurance premiums.

5. I have a lot of part-time and seasonal employees, how do I determine if I am considered a large employer?

Determining employer size requires calculating full time equivalent employees (FTE’s). This is a very specific calculation. You will find information and instructions in the Guide to assist you.

6. How do I ensure my health plan is affordable for my employees when I don’t know my employees’ household incomes?

There are safe harbors that enable employers to utilize known information such as W2 wages to determine affordability of coverage. It is also important to think strategically about the consequences of affordability for different workers to ensure the method you choose best supports your overall ACA strategy. learn more

7. Do I need to offer health coverage to my employees’ dependents?

If you are subject to the employer mandate, you are required to offer coverage to employees and their dependent children, but you are not required to offer coverage to spouses.  There are multiple considerations to determining who best to offer coverage to.

8. I already offer good coverage to my employees, so I don’t need to change what I’m doing, right?

The ACA has completely changed the landscape for employer-based health coverage; in our view, even an employer who already offers a good health plan cannot rest on its laurels. For example, an employer that offers good coverage may find that its eligibility requirements or waiting period may not comply with the law. That employer may also find that its coverage is not “affordable” (under ACA requirements) to some employees. In addition, large employers under the ACA are required to track and report to the IRS (as well as each full-time employee) on the coverage they offer, for each employee, for every month of the year. This tracking and reporting will, for many employers, add significant administrative burden and cost in the HR, benefits and/or payroll functions.

9. Does the employer mandate “delay” apply to my company?

The employer mandate delay was described in final regulations issued by the IRS in February, 2014, in which it is referred to as “transition relief.” This transition relief is complicated and does not apply to every employer. The field guide section on transition relief provides a detailed discussion of the transition relief, to whom it applies, and when. learn more

10. There is a lot of information circulating around about the ACA but it is not always consistent or specific to my situation, where do I find accurate information that will help me make practical decisions?

This is exactly why we created ACA Essentials, to provide an employer field guide to assist business leaders as they navigate the post ACA world. Guide me