Tag Archive for: aca benefits

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What is MEC and What Does It Cover?

Understanding Minimum Essential Coverage (MEC) can be complicated when compared to minimum value, essential health benefits, and actuarial value. 

Let’s start by answering: what is it and what does it cover? Minimum Essential Coverage is a plan that meets the Affordable Care Act (ACA) requirements for health coverage. Some of these programs include:

  • Marketplace plans
  • Job-based plans
  • Medicare
  • Medicaid

All applicable large employers (ALEs) with 50 or more full-time or full-time equivalent employees are required by law to provide ACA-compliant health coverage to their employees. ALEs who do not provide coverage ACA-compliant coverage are subject to fines and penalties from the Internal Revenue Service. 

What Are the Minimum Essential Coverage Option Levels Available?

There are three different plan options available. Understanding the difference between the three helps employers decide which MEC plan is best for their employees.

  • Standard MEC plans are ACA compliant and include coverage for wellness, preventative services, prescription discounts, and telehealth services. 
  • Enhanced MEC plans take coverage one step further than standard plans and are aimed at attracting and retaining top talent by also including primary and urgent care visits with low copays, and discounted specialist and laboratory services. 
  • The highest-level MEC plans include the enhanced MEC plan benefits along with added coverage such as prescription coverage and low copays. 

What Do Minimum Essential Coverage Plans with Hospital Indemnity Cover?

The goal of worksite MEC plans is to provide affordable healthcare coverage for the average person. MEC plans with added hospital indemnity policies can offset high deductibles and full out-of-pocket expenses so that an emergency does not become a financial crisis. The 10 health benefits they include are:

  1. Ambulatory Patient Services (outpatient services)
  2. Emergency Services 
  3. Hospital Visits 
  4. Maternity and Newborn Care
  5. Pediatric Services (including oral and vision)
  6. Mental Health and Substance Use Disorder Services (including behavioral health treatment) 
  7. Prescription Drugs
  8. Rehabilitative and Habilitative Services and Devices 
  9. Laboratory Services 
  10. Preventative and Wellness Services and Chronic Disease Management 

How Much Do You Save With MEC?

ALEs who fail to provide 95% of their full-time employees with ACA-compliant benefits are subject to high fines and penalties. Use our calculator to find out how much your business can save by providing Minimum Essential Coverage benefits while staying compliant with federal regulations.

Use our MEC Benefits calculator to see how much your business can save by offering MEC coverage.

What is the Difference Between MEC and Minimum Value?

Minimum value is a higher threshold than MEC. Minimum value is when a plan pays 60% of the actuarial value of allowed benefits under the plan. If a large employer offers benefits and meets Minimum Essential Coverage requirements, but they do not meet the minimum value, they meet the ACA employer requirements.

MEC and Essential Health Benefits

Essential health benefits are the core benefits that “qualified health plans” must cover. MEC also has a lower threshold than essential health benefits. If a group health plan doesn’t provide all of the benefits under essential health benefits, the coverage will likely meet Minimum Essential Coverage, so companies will be ACA-compliant.

Why is it Important to Understand the Differences?

Each of these coverage specifications is important to ensure large employers provide proper coverage to their employees. As an employer, you must understand your legal liability in providing benefits, as well as understanding what coverage you need to offer your employees to give them the best options and ensure compliance with the ACA. 

Curious why offering health insurance to your employees is so important? It encourages and promotes a healthier, happier, and stronger workforce. Read our article that explains why healthy employees improve work productivity here.

Opt-in vs Opt-out Health Insurance: What you Need to know

Large employers offering employees health benefits need to choose between opting all employees in automatically, encouraging them to opt-in, or making them opt out of health benefits. When it comes to health insurance, opting in and out plays a key part in enrollment. Using the right strategy can help you as a large employer provides coverage for your employees. 

 

Health insurance for employees promotes a healthier workforce because they partake in preventative care, which in turn creates more productive employees with higher morale. Health insurance keeps employers healthy through annual checkups, vaccinations, lab work, screenings, and immunizations. 

Increased employee morale because of benefits will influence your company positively because it: 

  • Increases teamwork across the organization 
  • Causes better retention of employees 
  • Increases productivity

The American Hospital Association reports, “health insurance facilitates access to care and is associated with lower death rates, better health outcomes, and improved productivity.” 

When employee health is supported, they are able to show up for work and be more productive. This reduces the amount you need to spend on paid time off, employee coverage, or hiring new employees. 

The Society for Human Resources Management found that it costs at least over $4,000 to hire and train a new employee, and can take up to 52 days to fill that position. Companies with 0-500 employees can expect to spend over $7,500 in hiring costs. Hiring a new employee to replace one who fell ill due to preventable illness because of lack of insurance is a costly and unnecessary expense. 

Opting in vs Opting out 

Offering employee benefits produces numerous positive outcomes for your company and your company’s employees. With this in mind, how does opting in and opting out of health insurance influence you as an employer?   

Opting in is the positive action taken to subscribe or enroll in health insurance whereas opting out requires that the employee automatically is signed up for health insurance, but they need to be able to unenroll just as easily. Persons opting in must check boxes or fill out information to agree to enroll. Persons opting out must uncheck or fill out information to end enrollment. 

 

A powerful example of the power of opting in or out comes from organ donations. European countries follow opting out options for organ donations. In order to indicate you do not want to donate organs in case of an accident, you must opt-out. Nearly all European countries with opt-out organ donation policies have nearly 100% organ donation participation among their people.

 

On the other hand, America and other countries that facilitate an opt-in policy with organ donation reap vastly different results.  Countries with opt-in policies have on average about 15% participation. 

 

The Association for Psychological Science found that “studies show that relying on inaction yields better results.”  

The psychology behind opting in and opting out

Psychologically, removing obstacles that make the desired behavior as easy as possible and obstacles in the way of unwanted behavior results in a performance of that desired behavior. Depending on the desired outcome, people will choose to opt-in or opt-out based on whichever action or option is easier.

 

The father of Social Psychology, Kurt Lewin, said, “make the actions you want to encourage easier, akin to moving downhill; and make the actions you want to discourage more difficult, aking to moving uphill” 

How does this influence your company? 

Employers encouraging employee health benefits because of their numerous positive rewards should consider using an opt-out method for higher retention of group health insurance.  

 

Opting out policies to consider are: 

  • “Opt-out arrangements should be offered under a Section 125 cafeteria plan to avoid unfavorable employee taxation.
  • The Affordable Care Act will consider certain opt-out payments as part of the employee’s premium for determining affordability under the act.
  • Unconditional opt-out
    • Conditional opt-out 
    • Eligible opt-out
  • Opt-out incentives should be offered to all eligible employees.
  • Federal and state law may consider opting out incentives to be wages for overtime pay.” 

 

At SBMA, we offer affordable benefits for everyday people that are compliant with the Affordable Care Act. It covers medical, ancillary, worksite, and virtual health. 

Read about why health insurance is important for your business here.

Voluntary Benefits Aid In Attracting the Best Employees

Including options for voluntary benefits and supplemental benefits is quickly becoming the norm for most employers who offer health insurance to their employees. As an employer, attracting the best talent and keeping them is of the utmost importance to maintaining a successful business. 

Over the last few years, there has been an increase in demand for voluntary benefits. While major medical coverage is the foundation of a good employee benefits program, it’s important to ask the question: how can I use these voluntary benefits to make my company more attractive to new prospects?

Let’s take a look.

Benefits of Offering Voluntary Benefits to Employees

Enhanced Employee Satisfaction and Retention

Offering voluntary benefits can increase employee loyalty and commitment to the company, as it shows that the employer is invested in their well-being.

Employees who have access to a wider range of benefits may experience less financial stress, which can lead to better job performance.

Access to voluntary benefits can also contribute to higher morale among employees, leading to a more positive work environment.

Attracting Top Talent

Companies that offer a comprehensive benefits package, including voluntary benefits, have a competitive edge in attracting top talent in their industry.

The ability to offer more benefits may also lead to an increase in job applicants, as potential employees are drawn to companies that invest in their employees’ well-being.

By offering a wider range of benefits, employers may also be able to recruit and retain employees who would otherwise look for positions with higher salaries.

Cost-effective Way to Offer More Benefits to Employees

Many voluntary benefits have limited or no cost to the employer, allowing them to offer more benefits without increasing their budget.

Voluntary benefits can also be affordable options for employees who may not have access to certain benefits otherwise.

Offering voluntary benefits can also provide tax advantages for both employers and employees, further increasing their value.

Most employers view voluntary benefits as a way to provide a choice to their employees, to offer options for their diverse workforce, and to ensure that their employees are happier and healthier. Employees need solutions that they can cater to their specific lifestyle.

Voluntary Benefit Options

Employers can offer a variety of voluntary benefits to employees to support their overall well-being and attract top talent. Health and wellness benefits such as telemedicine, wellness programs, and critical illness insurance can help employees maintain good physical and mental health. 

Financial benefits like retirement savings plans, student loan assistance, and life insurance can help employees manage their finances and plan for the future. Lifestyle benefits such as pet insurance, legal assistance, and travel assistance can provide additional support for employees’ personal needs.

 Other popular voluntary benefit options include hospital confinement, accident and critical illness coverage, disability, cancer, legal services, identity theft protection, and commuter benefits. This shift towards offering a wide range of voluntary benefits allows employers to align their benefits strategy with their overall company values and attract employees who value comprehensive coverage. Additionally, offering voluntary benefits can help employers retain top talent and create a loyal, committed workforce.

Implementing Voluntary Benefits Programs

Employee surveys and needs assessments are critical to identifying the most valuable benefits to offer in a voluntary benefits program. Employers can use surveys to gather information about what types of benefits employees would be interested in and what benefits they may already have. Additionally, needs assessments can identify the specific needs of different employee groups, such as new hires, long-term employees, or those approaching retirement. This information can help employers choose the benefits that are most relevant and valuable to their employees.

After identifying the most valuable benefits, the employer must evaluate and select benefit providers that offer the best value for the company and employees. This involves researching and comparing different providers to find the best offerings and pricing. Employers should also ensure that the providers they choose have a good reputation and are reliable.

Once the benefits have been chosen and the providers have been selected, the employer must communicate the benefits options and enrollment procedures clearly to employees. This may involve creating informational materials such as brochures, presentations, or videos that explain the benefits and how to enroll in them. Employers may also want to offer workshops or one-on-one consultations to help employees understand the benefits and make informed decisions about their enrollment.

Finally, to ensure the program’s success, the employer should measure and evaluate its effectiveness regularly. This may involve collecting feedback from employees, tracking enrollment rates and utilization of benefits, and reviewing the program’s impact on employee satisfaction and retention. This information can help employers identify areas of improvement and make adjustments to the program to ensure it remains aligned with employee needs and expectations.

In Summary

Offering voluntary benefits is an effective way to attract and retain top talent, increase job satisfaction and performance, and provide cost-effective benefits to employees. Employers should conduct employee surveys, evaluate benefit providers, communicate benefits options clearly, and measure program success to ensure a successful voluntary benefits program. As such, employers should consider offering voluntary benefits as part of a comprehensive benefits package to attract and retain the best employees.

With multiple generations involved in their workforce today, an employer must offer benefits that would cater to each of their needs. Those who are older might consider traditional benefits packages to be sufficient, but younger generations might prefer voluntary options.

Not only do these benefits allow your company to attract and retain talent that will benefit your company in the long run. For more information on how you can offer the best, affordable benefits to your employees, contact our team.

ACA Reporting Deadlines and Compliance Requirements in 2023

The Affordable Care Act (ACA) has been in effect for over a decade, but its reporting and compliance requirements continue to evolve. In 2023, businesses and employers will face several ACA reporting deadlines and compliance requirements that they must adhere to in order to avoid penalties and maintain compliance with the law. 

 

These requirements include providing healthcare coverage to employees, filing information returns with the IRS, and furnishing statements to individuals. It is essential for employers to understand these requirements and stay up to date with any changes or updates to ensure that they are meeting their obligations under the ACA.

What Are the ACA Reporting Deadlines at the Beginning of 2023 to Report on the 2022 Calendar Year?

New regulations have been finalized by the IRS, which stipulate that Applicable Large Employers (ALEs) must provide their employees with the Forms 1095-C on or before March 2, 2023. Additionally, ALEs are required to file Form 1094-C and provide copies of Forms 1095-C to the IRS by March 31, 2023 if they choose to file electronically. 

 

Employers who must file fewer than 250 returns are permitted to file on paper, but must do so no later than February 28, 2023. It is important for ALEs to meet these deadlines to ensure compliance with the Affordable Care Act (ACA) reporting requirements and avoid potential penalties.

ACA Reporting: Overview

The Affordable Care Act (ACA) mandates that Applicable Large Employers (ALEs) report whether they provided full-time employees with affordable, minimum essential coverage (MEC) that meets minimum value requirements. For employers with self-insured plans, regardless of their size, reporting must also include months of coverage for all individuals enrolled. 

 

The reporting requirements for ALEs, regardless of their funding arrangement, are fulfilled through IRS Forms 1094-C and 1095-C. This overview highlights the essential elements of ACA reporting for ALEs.

 

ACA Reporting Deadlines for ALEs

The IRS has recently made changes to the ACA reporting deadlines for Applicable Large Employers (ALEs) by finalizing new regulations that make the automatic 30-day extension permanent. This extension, which was previously available to employers who needed extra time to furnish Form 1095-C to individuals, will now be available for all future years of ACA reporting.

 

The ACA reporting deadlines for ALEs will now be as follows:

 

  • Form 1095-C: Deadline to Furnish to Individuals

Standard Due Date: January 31

Automatically Extended Due Date: March 2

(Leap Year Due Date: March 1)

  • Form 1094-C (+Copies of Form 1095-C):

Deadline to File with IRS by Paper

Standard Due Date: February 28

  • Form 1094-C (+Copies of Form 1095-C):

Deadline to File with IRS Electronically (Required for 250 or More Returns)

Standard Due Date: March 31

 

If the due date falls on a weekend or a legal holiday, the deadline is extended to the next business day.  These deadlines apply to all ALEs regardless of their plan year.

 

The IRS has also proposed regulations that would reduce the required electronic filing threshold to employers filing just 10 or more returns.  That reduced 10-return electronic filing threshold has not been finalized and therefore is not currently being enforced.

ACA Reporting: Fully Insured vs. Self-Insured Plans

The ACA reporting requirements for Applicable Large Employers (ALEs) differ based on whether their medical plan is fully insured or self-insured. Level funded plans are considered self-insured for reporting purposes as they are not fully insured. ALEs with fully insured medical plans are not required to report under §6055 in Part III of Form 1095-C. Their only reporting responsibility is under §6056, which covers Parts I and II of Form 1095-C as well as the full Form 1094-C. 

 

In contrast, enrolled employees and their dependents’ coverage information for a fully insured plan is reported by the insurance carrier on Form 1095-B, and the carrier is solely responsible for furnishing and filing the Form 1095-B coverage information and soliciting any missing dependent SSNs. ALEs with self-insured medical plans are subject to §6055 reporting and must complete Part III, in addition to Parts I and II, of Form 1095-C.

 

The following overview addresses ACA reporting obligations by employer size and funding arrangement:

ALE Sponsoring a Self-Insured Medical Plan (Including Level Funded)

IRC §6055 and §6056 Reporting

 

  • Completed via Forms 1094-C and 1095-C.
  • Employer must complete Part III of the Form 1095-C (“Covered Individuals”) for enrolled individuals.
  • If the employer sponsors both self-insured and fully insured medical plan options, the employer completes Part III only for individuals enrolled in the self-insured medical plan.

 

Important Note: “Level funded” plans are considered self-insured for these purposes.

ALE Sponsoring a Fully Insured Medical Plan

IRC §6056 Reporting Only

  • Completed via Forms 1094-C and 1095-C.
  • Employer does not complete Part III of the Form 1095-C (“Covered Individuals”).
  • Insurance carrier completes coverage information on separate Form 1095-B.

 

Non-ALE Sponsoring a Self-Insured Medical Plan (Including Level Funded)

IRC §6055 Reporting Only

  • Completed via Forms 1094-B and 1095-B.
  • Employer does not complete Forms 1094-C and 1095-C (because not subject to the employer mandate).
  • Employer information listed in Part III (“Issuer or Other Coverage Provider”) of the 1095-B.
  • Employer does not complete Part II (“Information About Certain Employer-Sponsored Coverage”) of the Form 1095-B.

Important Note: “Level funded” plans are considered self-insured for these purposes.

Non-ALE Sponsoring a Fully Insured Medical Plan

No ACA Reporting!

ACA Reporting: Controlled Groups

For an ALE that falls under the ACA employer mandate and has multiple corporate entities in a controlled group, each subsidiary or related entity in the controlled group must file a separate Form 1094-C. Each entity, also known as an Applicable Large Employer Member (ALEM), must file their own report.

Aggregated ALE Groups have additional ACA reporting obligations:

 

Form 1094-C for each ALEM must contain the following:

  • Part II, Line 21: Each ALEM must answer “Yes” to the question “Is ALE Member a member of an Aggregated ALE Group?”
  • Part III, Column (d): The “Aggregated Group Indicator” box will be checked for each month in which the controlled group existed.
  • Part IV: The “Other ALE Members of Aggregated ALE Group” section will be completed listing the names of the other related entities in the controlled group (the other ALEMs) and their EINs.

 

Forms 1095-C from each ALEM must contain the following:

 

  • The full-time employees of each EIN (i.e., each ALEM) must receive a Form 1095-C with that ALEM’s corporate name and EIN.
  • If an employee works for more than one ALEM in the Aggregated ALE Group in any calendar month, the ALEM for whom the employee worked the most hours of service in that calendar month is responsible for the employee’s Form 1095-C ACA reporting for that month.

 

It is important to note that Aggregated ALE Groups must comply with all ACA reporting requirements and that failure to do so could result in penalties.

ACA Reporting: COBRA Guidelines

Employers with fully insured plans only need to address additional COBRA-related ACA reporting requirements in the event of an employee’s qualifying event being a loss of coverage due to a reduction in hours. The appropriate coding in such a case depends on whether the employee has elected COBRA and whether the employee was in employee-only or family coverage.

 

Apart from the above requirements, self-insured plans (including level funded plans) must report coverage information completed in Part III for all months of active or COBRA coverage.

 

Part II of Form 1095-C for COBRA participants who were a full-time employee for at least one month in the year will be completed similarly for both self-insured and fully insured plans. For individuals who were enrolled in COBRA under a self-insured plan for at least one month in the reporting year but whose active coverage terminated in a previous year, the Part II coding will indicate that the individual was not an employee for any month of the year (Code “1G” in Line 14 for all 12 months).

 

Note: additional rules apply when the spouse or dependent elects COBRA separately from the employee.

Still Have Questions?

The best way for employers to remain compliant with healthcare laws is to consult with a team of professionals. Our team at Innovative HIA understands the ACA and can help you stay up-to-date on any changes to the law. 

 

Why Innovative Hia is the Gold Standard of Service

At Innovative Hia, we serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act.

We’re in the business of providing health care to everyday people, ensuring peace of mind through trust and transparency.

We pride ourselves on our personal service, speed of  implementation, and innovative approach to providing benefits coverage.

Today, we’d like to chat a bit more about the exceptional service we provide and why SBMA is, therefore, the gold standard of customer service for minimum essential coverage (MEC) insurance providers.

(Hint: Our one-stop-shop benefits portal plays a large role in our successful customer service efforts!)

Let’s dive in.

WHAT PROBLEM DO WE SOLVE?

With us, you get peace of mind, security, and the insurance your employees want at a price everyone can afford. Providing affordable benefits to your employees not only ensures you employees remain motivated and excited about work, but they also ensure you remain in compliance with the ACA.

WHAT MAKES INNOVATIVE HIA BENEFITS DIFFERENT?

Our customer service is what sets us apart. We work when you work. Our carrier partners have given us exclusive offerings to complement our medical plans, giving you the best possible price. Our quick execution and advanced approach to benefit coverage is second to none.

HOW INNOVATIVE HIA SUPPORTS THE ONBOARDING AND OFFBOARDING PROCESSES

At SBMA, we support businesses beyond providing affordable minimum essential coverage (MEC). We are proud to support the employee onboarding process so your human resources (HR) teams have more time to focus on the daily tasks that keep your business running.

This is why we offer a complete insurance solution that covers:

  • Implementation
  • Enrollment
  • Administration, and
  • Reporting

Our benefits professionals are fully equipped to support onboarding and offboarding procedures to eliminate the hassle for businesses.

How? Using our benefits portal.

OUR BENEFITS PORTAL

Employee benefits administration can be a pain for any HR department. At SBMA, we aim to simplify the process by giving you access to everything you need in one place.

Our one-stop-shop portal is proprietary and unlike any other. Our portal grants you access to all of the tools necessary to support a new hire (from beginning to end).

We eliminate the headache of unnecessary paperwork with benefits management portal access. You can:

  • Make plan changes
  • Order ID cards
  • Check a claim status online
  • Track onboarding and offboarding
  • And more

Resources are only a click away.

Besides creating a seamless onboarding process with our all-in-one portal, we also provide video tutorials for our partners. These resources provide instructions that assist navigation through the portal.

Read on to view our enrollment portal walkthrough.

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Why You Should Offer Voluntary Benefits Plans

Voluntary benefits are referred to as employee-paid benefits or supplemental insurance. They are benefits offered by employers to their employees at no additional cost to the employer. The employees pay the full cost of the plan, but it’s made available to them through their employer. 

Voluntary benefits offer employees access to purchase additional benefits if they choose to do so in addition to the basic benefits their employers may provide. Typically, employees who choose to purchases also receive a discounted group rate they wouldn’t be able to receive on their own. 

When offering voluntary benefits, employees have the opportunity to customize their plan based on their lifestyle. 

The Benefits Employees Can Choose From Encompass Areas Ranging From:

  • Health 
  • Dental 
  • Vision
  • Wellness/Lifestyle
  • Financial 
  • Security
  • Personal and miscellaneous 

The customization that voluntary benefits allows is rising in popularity, especially as Millennials and Generation Z grow in the workforce. 

According to a study from LIMRA, about 57% of employers in the United States offer voluntary benefits. They tend to lean towards voluntary benefits because of the flexibility offered in customization of what they want covered instead of blanket coverage they won’t use. Employers looking to attract younger talented populations should consider offering voluntary benefits. 

Learn more about Affordable Benefits, talk with one of our team members!

Employee Advantages of Voluntary Benefits:

As an employee, what are the benefits to choosing a voluntary benefit plan instead of a traditional coverage plan? The list below explains the Ad of voluntary plans: 

  • Group purchasing rates help you as an employee have access to discounted benefit prices that you normally wouldn’t have access to alone. 
  • Choose what you want to include and exclude in your plan based on your personal needs. 
  • One less bill to pay monthly because it is deducted from your payroll before tax. 
  • They can offset increased prices in healthcare insurance premiums. 
  • Financial safety net in case traditional insurance does not fully support you. 

Traditional insurance plans include premiums and deductibles for coverage you may not even want. With voluntary benefits, you can mix and match. Let’s say you are looking to cover dental care, and critical illness insurance, but you don’t want to include vision services. 

You Can Create that Plan and Only Pay for What You Want and Need, Nothing More.

Employer Advantages of Voluntary Benefits:

As an employer, offering voluntary benefits helps you all around:

  • Reduce out-of-pocket health care costs 
  • Paid 100% by the employee
  • Access to group rates 
  • Gives employees the choice to choose a tailored healthcare plan instead of a stringent plan 
  • Saves you billing time through automatic payroll deductions 
  • Attract and retain top talent since about 77% of workers say that benefits packages are important in deciding to accept or reject a job offer
  • These benefits can be offered to full and part time employees

By offering the opportunity to take advantage of voluntary benefits, you establish peace of mind for employees that they are covered the way they best see fit. Employees with peace of mind are able to focus more at work, and be more satisfied and engaged. 

Voluntary benefits are a win-win situation for employees and employers. The employer saves on coverage costs while the employee takes advantage of creating their own plan. 

At Innovative HIA, we understand the rising importance of voluntary benefits in the workforce. Our goal is comprehensive coverage to provide a complete solution for employers who want to provide affordable benefits to their workers. We provide a variety of options for employees to choose from. Reach out to see what voluntary benefits you can offer your employees today. 

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Full-Time vs Part-Time Benefits: Why It Matters

Employers need to make sure they are compliant with the Affordable Care Act (ACA) and the employer shared responsibility regulations, also known as “the employer mandate” or ALE. This means that employers must consider many factors when deciding between offering full-time vs part-time benefits, including the costs associated with providing health coverage and other employee benefits.

In this blog we’ll explore the differences between full-time (FT) and part-time (PT) benefits and why it matters for business owners.  

What is the ACA’s Employer Mandate?

The Affordable Care Act’s (ACA) Employer Mandate is a federal law requiring businesses with 50 or more full-time employees to provide health insurance coverage to those employees, or face penalties. The ACA requires employers to offer minimum essential coverage that meets certain affordability and value requirements. Employers must also comply with certain reporting requirements so the government can keep track of employer compliance with the law.

The Employer Mandate is one of the most important elements of the ACA, as it helps ensure that more Americans have access to quality health care coverage. The goal of this law is not only to ensure that employers are providing health insurance to their employees, but also to make sure those plans are comprehensive and affordable.

The ACA’s Employer Mandate requires Applicable Large Employers (ALEs) to provide their full-time employees with affordable Minimum Essential Coverage (MEC), meeting Minimum Value (MV) requirements, that covers at least 95% of the workforce.

The Employer Mandate is enforced by the Internal Revenue Service (IRS), and while penalties can be imposed if an employer fails to comply with the law, there are some exemptions that may apply. For example, employers who offer health coverage but do not meet minimum value requirements may qualify for a “hardship exemption.” Additionally, employers with fewer than 50 full-time employees are not subject to the Employer Mandate.

What is ALE (Applicable Large Employer)? 

Applicable Large Employer status is a designation given to certain employers by the Internal Revenue Service (IRS) under the Affordable Care Act (ACA). The ACA requires applicable large employers to offer health insurance coverage to their full-time employees or pay a penalty. 

An applicable large employer is any business that has at least 50 full-time employees, or a combination of full-time and part-time employees that are equivalent to at least 50 full-time employees.

What Qualifies an Employee as Full-Time?

Generally, an employee is considered full-time if they work an average of 30 or more hours per week. Certain government agencies may have specific definitions to define full-time employees, such as those that qualify for unemployment benefits. Depending on the situation, an employee may also be considered full-time if they are classified as a salaried or exempt employee, meaning they would receive a set salary regardless of the number of hours worked. 

 

Overall, being aware of an employer’s definition of full-time employment can be beneficial for both employers and employees. Knowing what qualifies as full-time can ensure that employees receive the correct benefits and employers are in compliance with any applicable regulations.

What Benefits are Generally Offered to Full-Time Employees?

Full-time employees typically receive benefits such as health insurance, vacation time, 401(k) plans, and other company-sponsored retirement plans. Some employers may also offer tuition reimbursement programs, life and disability insurance, flexible spending accounts (FSAs), and employee discounts. The specific benefits offered to full-time employees vary greatly depending on the employer and the industry. 

Additionally, many organizations are now offering mental health support, remote working options and other perks that may benefit employees in these uncertain times. 

Full-time employees must be offered benefits if the employer is subject to ALE, while part-time employees are not eligible for coverage until they meet certain hours thresholds. Employers should carefully consider how their benefits packages will affect the ACA and ALE compliance in order to avoid penalties or fines that could arise from noncompliance.

What Qualifies as Part-Time Employment and Benefits?

Part-time employment typically refers to a worker who is employed for fewer hours per week than a full-time worker. Some employers may offer part-time employees the same benefits as their full-time counterparts, including health insurance, paid time off, and retirement savings plans. However, there can be differences in the amount of benefits offered depending on the employer. For example, some employers may offer reduced health care plans or no retirement savings plan to part-time employees. In addition, some employers may cap the amount of paid time off for part-time workers. It is important for potential and existing part-time employees to know their rights under the applicable labor laws. 

Additionally, employers need to be aware of the different rules for eligibility for full-time and part-time employees. For example, if an employer offers a health plan that is limited to full-time employees but also has part-time employees who work more than 30 hours per week, they may not be eligible to receive coverage under this plan. This means that employers must be very careful when establishing eligibility criteria for their benefits plans and make sure that they are compliant with the ACA and ALE regulations.

How PT vs FT Employee Benefits Impact Retention

Employers should also consider how their employee benefit packages affect their employee retention strategies. Offering attractive benefits to full-time employees can help retain them, while providing minimal or no benefits to part-time employees may lead to high turnover rates. Employers need to assess their workforce needs and determine if it is necessary to offer benefits to part-time employees in order to maintain a healthy and productive workforce.

Things to Consider

Overall, employers must take into account the costs of providing employee benefits, as well as the compliance requirements of the ACA and ALE when deciding between offering full-time vs part-time benefits. Employers should also consider their employee retention strategies and make sure they are providing adequate benefits to ensure long-term loyalty from both full-time and part-time employees.  With proper planning, employers can create an effective benefits package that meets the needs of their workforce while remaining compliant with all applicable regulations.

The Affordable Care Act (ACA) requires employers to calculate the number of employees that qualify as full-time and full-time equivalent for each month in order to determine if they are an Applicable Large Employer (ALE). This calculation involves taking the total number of full-time designated employees, plus all non-full-time designated employees’ hours for the month and dividing by 120. The resulting number is then added to the full-time employee count to determine ALE status. 

To ensure accurate calculations, employers can outsource their ACA compliance process to a service provider who will measure workers’ hours of service and calculate FTEs and ALE status on their behalf. Accurately calculating ALE status is essential for employers to minimize potential penalty exposure from the IRS.

To Sum It Up

The decision to provide full-time or part-time benefits to employees is a complex one that requires careful consideration of various factors such as cost, compliance with ACA and employer shared responsibility regulations. Employers should look into their options and evaluate which option is best for them in order to ensure they are providing their employees with quality benefits. Ultimately, offering the right benefits to employees can help businesses attract and retain talent.

If you’re a business owner that needs help navigating FT/PT employee benefits, reach out to us today!

HIPAA vs FERPA: What’s the Difference?

There are laws in place to protect the privacy of patients and students. Continue reading to learn the difference between HIPAA and FERPA.

What is HIPAA? 

HIPAA stands for Health Insurance Portability and Accountability Act of 1996. Under this federal law, patient health information is protected and kept secure unless the patient gives consent to disclose their information. The patient has control of who has access to their records. 

It’s a national mandate to keep protected health information (PHI) secure. At its core, HIPAA regulates the privacy of health information on a national level. 

PHI includes:

  • Your name
  • Your address
  • Your Social Security Number 
  • Medical records 
  • Any unique identifiers 

For example, if parents of a college student call their child’s doctor for an after-visit summary, the office will not be able to disclose any information without the child’s consent. 

Who has to Follow HIPAA Rules? 

Any entity that falls under the category of “covered entities,” must always enforce HIPAA law. These include:

  • Health care providers
  • Health Care Clearinghouses 
  • Health Care Plans
  • Business Associates 

Why is HIPAA Important 

HIPAA keeps personal information secure for patients. It helps build trust between the entity holding private medical information and the patient. Allowing patients the choice to disclose records to whoever they decide keeps sensitive information safe from landing in the wrong hands.  

HIPAA Violations Examples 

HIPAA violations breach patient confidentiality and can result in fines and penalties. Common violations include: 

  • Cyber-attacks or breaches in security 
  • Lack of data encryption 
  • Sending the wrong PHI to a patient 
  • Discussing PHI outside of work 
  • Posting PHI on social media 
  • Theft of equipment that has PHI 
  • Incorrectly disposing of patient records 

What is FERPA

FERPA stands for the Family Educational Rights and Privacy Act that was implemented in 1974. This law is another federally mandated law that regulates the privacy of student information on a national level. It protects the privacy of student school records that the education system holds. 

Parents or legal guardians have access to the records and can have the records amended, and have the ability to disclose personally identifiable information from education records to their discretion until the student is 18 years old. 

According to the CDC, FERPA serves these two main purposes:

  1. “Gives parents or eligible students more control of their educational records. 
  2. Prohibits educational institutions from disclosing ‘personally identifiable information in education records’ without written consent.” 

Who Has to Follow FERPA Rules?

Any of the following public and private education systems are required to follow FERPA policy when they receive federal funding:

  • Elementary schools 
  • Secondary schools 
  • Post-secondary schools 
  • State and local education agencies 

Why is FERPA Important? 

FERPA is important because it allows students, parents, and legal guardians the ability to review school records, request any corrections that need to be made, and control who has access to the student’s personal identification information.

The education system must request consent from the student, parent, or legal guardian before releasing any personally identifiable information to keep the student’s information safe from the wrong hands. 

FERPA Violations Examples 

The federal government will revoke federal funding to education systems that violate FERPA regulations. Common FERPA violations include: 

  • The education system refuses to provide school records to the student, parents, or legal guardians.
  • School employees who, even unintentionally, disclose the academic standing of one student to other students. 
  • Telling parents about other child’s academic standing that is not their own. 
  • Posting student grades in public places with their names attached 
  • Allowing a parent volunteer to grade the exams of other students

HIPAA VS FERPA

Both HIPAA and FERPA are nationally mandated laws that protect information. HIPAA keeps medical records secure while FERPA keeps education records private. Failure to comply with either results in fines, penalties, or revocation of funding. 

Are you concerned with the HIPAA compliance of your virtual doctor’s appointment? Read about the HIPAA compliance standards that Zoom upholds to ensure your personally identifying information is kept safe in this article.

For more information about protected health information, read our article here.

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Why Innovative HIA is the Gold Standard of Customer Service

At Innovative HIA, we pride ourselves on offering:

  • Affordable Benefits
  • ACA Compliance, and
  • Exceptional Service


Today, we’d like to chat a bit more about the third element—the exceptional service we provide—and why Innovative HIA is, therefore, the gold standard of customer service for Minor Medical insurance providers.

(Hint: Our one-stop-shop benefits portal plays a large role in our successful customer service efforts!)

Let’s dive in.

How Innovative HIA Supports the Onboarding and Offboarding Processes

At Innovative HIA, we support businesses beyond providing Minor Medical coverage. We are proud to support the employee onboarding process so your human resources (HR) teams have more time to focus on the daily tasks that keep your business running.

This is why we offer a complete insurance solution that covers:

  • Implementation
  • Enrollment
  • Administration, and
  • Reporting

Our benefits professionals are fully equipped to support onboarding and offboarding procedures to eliminate the hassle for businesses.

How? Using our benefits portal.

Our Benefits Portal

Employee benefits administration can be a pain for any HR department. At Innovative HIA, we aim to simplify the process by giving you access to everything you need in one place.

Our one-stop-shop portal is proprietary and unlike any other. Our portal grants you access to all of the tools necessary to support a new hire (from beginning to end).

We eliminate the headache of unnecessary paperwork with benefits management portal access. You can:

  • Make plan changes
  • Order ID cards
  • Check claim status online
  • Track onboarding and offboarding
  • And more

Resources are only a click away.

Besides creating a seamless onboarding process with our all-in-one portal, we also provide video tutorials for our partners. These resources provide instructions that assist navigation through the portal.

Read on to view our enrollment portal walkthrough.

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ACA Penalty A and B Breakdown

All applicable large employers (ALEs) must comply with the Affordable Care Act (ACA), which requires employers to offer minimum essential coverage to all employees.

If an employer does not comply with this employee coverage requirement could lead to penalties for the employer and potentially an IRS audit.

Below is a breakdown of ACA penalties A and B, and how they could affect your company.

Who is Considered a Large Employer?

First, who is considered a large employer?

Any company or organization that has an average of at least 50 full-time employees or “full-time equivalents (FTEs) is considered an applicable large employer.

*For the purposes of the ACA, a full-time employee is someone who works a minimum of 30 hours a week.

What Are ACA Benefits?

The ACA was created in 2010 to offer more affordable health benefits to a wider range of people. Any ACA-compliant benefit plan must cover these 10 health benefits:

  • “Ambulatory services
  • Emergency services
  • Hospitalization
  • Pregnancy, maternity, and newborn care (before and after birth)
  • Mental health and substance use disorder services
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services 
  • Preventative and wellness services and chronic disease management 
  • Pediatric services”

Additionally, ACA benefits cover birth control and breastfeeding support. 

The Employer Mandate (Penalty A)

Employers must offer at least Minimum Essential Coverage (MEC) to any benefit-eligible employee. Non-compliance will generally result in a penalty of $2,500,000 PER eligible employee.

The Employer Mandate (Penalty B)

Employers must offer a minimum value plan that meets 60% actuarial value including hospitalization services.

The MV plan must be offered at a maximum contribution of 9.86% of the employee’s income – YOU pay the difference.

For example, take a California minimum wage employee: A $10.00/hour employee working a minimum of 30 hours per week has a maximum employee contribution of $128.18 per month.

If the plan cost is $300, YOU pay the difference of $171.82 per month. 

Non-compliance will generally result in a $3,750.00 penalty PER employee who enrolls in coverage through the state exchange AND receives a premium subsidy.

The Individual Mandate

The individual mandate went away starting January 1st, 2019 for the majority of Americans.

Those individuals living in the District of Columbia, Massachusetts, or New Jersey will continue to be penalized for the individual mandate.

Infographic of ACA Penalty A and B Breakdown

These penalties can add up to a lot of expenses for your business. At Innovative HIA, we want to help you avoid any potential penalties for lack of proper insurance. Contact our team at Innovative HIA for more information regarding your employer benefit needs.