Tag Archive for: ACA

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.

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. 

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.

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!

The Affordable Care Act (ACA) has a number of different mandates and regulations, which can carry hefty penalties if you don’t comply. If you receive an ACA penalty, it’s important to understand what to do in order to minimize the impact of this financial burden. In this blog post, we will discuss the types of ACA penalties that you may face, as well as how to navigate the process of dealing with them. We will also provide tips on how to avoid ACA penalties in the future. 

 

If you are a business owner trying to remain compliant, this blog post will help you take the necessary steps to stay up-to-date with your obligations under the ACA and avoid costly penalties in the future.

What are Some Reasons Why a Business Owner Could Receive an ACA Penalty?

There are a few reasons why a business owner may receive an ACA penalty:

  1. Not Offering Qualified Health Insurance Coverage – The employer mandate requires employers with 50 or more full-time employees provide qualified health insurance coverage to at least 95% of their full-time employees. If a business fails to offer this coverage, they may be subject to an ACA penalty.

 

  1. Not Providing Affordable Coverage – Employers must also provide affordable coverage to at least 95% of their full-time employees. If the employer fails to meet this requirement, they may be subject to an ACA penalty.

 

  1. Failing To Offer Dependent Coverage – The ACA requires employers to offer dependent coverage up to the age of 26. If an employer fails to provide this coverage, they may be subject to a penalty.

 

  1. Not Adequately Reporting ACA Information – Employers are responsible for accurately reporting employee health insurance information on their taxes and other forms. Failure to do so can result in an ACA penalty.

 

  1. Offering Coverage to Employees Who Are Not Eligible – Employers must also make sure that all of their employees who are eligible for coverage are offered coverage, or else they may be liable for an ACA penalty.

 

  1. Failing To Comply With State Regulations – Some states have their own requirements when it comes to providing employee health insurance. If a business fails to comply with these regulations, they may be subject to an ACA penalty.

 

No matter what the reason, it is important for employers to understand their obligations under the ACA so that they can avoid penalties. By understanding the law and taking steps to ensure compliance, employers can avoid costly ACA penalties.

By following the guidelines set forth by the ACA, employers can ensure that they are compliant and avoid having to pay unnecessary penalties. It is important for businesses to stay up-to-date on all of their responsibilities under the law in order to remain compliant and avoid costly fines or penalties. Employers should consult with an experienced attorney or tax specialist to ensure that they are in compliance with the ACA.

The consequences of not complying with the ACA are serious. Business owners should make sure that they understand their responsibilities and take steps to ensure compliance in order to avoid costly penalties or fines. An experienced attorney or tax specialist can help business owners stay up-to-date on all of their obligations under the law.

Additionally. . . 

There are many other reasons why a business owner may receive an ACA penalty, and it is important to understand them in order to avoid them. Consulting with an experienced attorney or tax specialist can help employers understand the law and ensure that they remain compliant. By doing so, businesses can avoid costly penalties while providing quality healthcare coverage for their employees.

The Affordable Care Act is a complicated law and understanding it can be difficult. However, by taking steps to make sure that they are compliant with all of the provisions, employers can avoid costly penalties and fines. By consulting with an experienced attorney or tax specialist, employers can make sure that they remain compliant while providing quality health care coverage to their employees.

By understanding their obligations under the ACA, businesses can ensure that they remain in compliance and avoid any unnecessary penalties or fines. With the help of an experienced attorney or tax specialist, businesses can make sure that they are up-to-date on all of their responsibilities under the law and remain compliant with the ACA.

What to Do if You Receive a Penalty

If you’re a business owner and have received an ACA Penalty from the IRS, take the following steps:

  1. Contact your tax advisor. Your tax advisor should be able to provide advice about how to proceed with this penalty and whether it can be appealed or reduced in any way.

 

  1. Review your employee records. The penalty could be the result of incorrect or incomplete information about your employees, so make sure all records are up-to-date and accurate.

 

  1. Determine how you’ll pay the penalty. You may have to pay the penalty in a lump sum or over several payments, depending on how much is owed.

 

  1. Contact the IRS to discuss payment options. The IRS may be able to assist you in setting up a payment plan for paying the penalty, or they may be willing to work out an alternative arrangement.

 

  1. Establish a compliance program going forward. Once the penalty is paid and any necessary documents are filed, it’s important to ensure your business is compliant with the ACA going forward. Work with your tax advisor or another specialist to set up a compliance program that will help you avoid penalties in the future.

 

  1. Appeal if necessary. If you feel the penalty was issued incorrectly or unfairly, you can appeal it by filing an application for reconsideration with the IRS. Your tax advisor can help you determine if appealing is a viable option for your situation. 

 

By following these steps, you can ensure that your business is compliant with the ACA and any penalties are handled appropriately.

In Summary

The key to avoiding future ACA Penalties is understanding how the law applies to your business and making sure all of your employee records are accurate and up-to-date. Additionally, establishing a compliance program and regularly reviewing your employee records is essential to avoiding future penalties. Finally, be sure to contact the IRS if you receive a penalty and consider appealing it if necessary. With these steps in place, you can help ensure that your business remains compliant with the ACA going forward.

By taking steps to make sure that their business is complying with all of the provisions of the law, employers can avoid costly penalties and fines. The best way for employers to make sure that they remain compliant is to consult with a professional like our team at Innovative HIA, who understands the ACA and can help them stay up-to-date on any changes to the law.

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.

The Affordable Care Act, also known as Obamacare, was one of the biggest healthcare overhauls in recent history. It aimed to provide affordable health insurance coverage for all Americans. After several failed attempts to repeal the act, it seems that ACA is here to stay. 

In this blog post, we will take a closer look at what this means for American taxpayers and businesses.

What Is the Affordable Care Act (ACA)?

The Affordable Care Act was passed in 2010 and since then it has been under constant threat of repeal. The law required all Americans to have health insurance coverage or face a tax penalty. It also expanded Medicaid coverage and provided subsidies to help people afford private health insurance plans.

 

In 2017, Republican lawmakers attempted to repeal the Affordable Care Act but were unsuccessful. This led to a lot of uncertainty about the future of the law. However, it now seems that ACA is here to stay, at least for the time being.

What Does this Mean for American Taxpayers?

For starters, it means that the tax credits and subsidies that help people afford their health insurance coverage are still in place. It also means that the Medicaid expansion, which has provided coverage for millions of low-income Americans, is still in effect.

 

Taxpayers will continue to be responsible for funding the ACA. This includes the subsidies that help people pay for health insurance and the Medicaid expansion. The good news is that, because the ACA is no longer being repealed, there will be no need for major changes to the tax code.

What Does this Mean for Businesses?

The Affordable Care Act requires businesses with 50 or more employees to provide health insurance coverage for their workers. This requirement is still in place, so businesses will need to continue to comply with it.

 

There may be some changes to the way this is done in the future. For example, the government may provide more subsidies to help businesses cover the cost of health insurance. 

 

Overall, the news that ACA is here to stay is good news for American taxpayers and businesses. It provides stability and certainty in an uncertain time.

Final Thoughts

The Affordable Care Act has provided many benefits, including increased access to healthcare, lower costs for prescription drugs, and free preventive care services. These benefits are worth billions of dollars each year and help to improve the lives of millions of Americans.

 

There is still some uncertainty about the future of the Affordable Care Act, but for now, it seems that the law is here to stay. This is good news for American taxpayers and businesses who have benefited from the law’s many provisions.

 

If you’re interested in learning more about the ACA, read these articles published by SBMA: the advantages of the ACA and  what business owners should know about ACA benefits



While all organizations are susceptible to receiving IRS penalties, some industries are particularly vulnerable. These industries include home healthcare, staffing, restaurant, and construction industries.

Why are these industries under fire from the IRS? Let’s take a look.

These Industries Typically Have a High Number of Hourly Workers

Home healthcare, staffing, restaurant, and construction industries have a high percentage of hourly workers with varying schedules. This can make it difficult for employers to determine which employees are ACA full-time and require an offer of health coverage.

HR is often a non-centralized function, making it challenging to gather the data necessary for compliance.

High Staff Turnover Rates

These industries are often associated with a high employee turnover rate. This can make it difficult for employers to track employees as their benefits.

Workforces that Disproportionately Decline Health Coverage

Home healthcare, staffing, restaurant, and construction industries generally employ workforces that are more likely to decline offers of health coverage benefits. Employers may struggle to track declinations and face ACA penalties from the IRS.

How Can Organizations Ensure They Are Complying with ACA Requirements?

Employers can ensure they are ACA compliant by determining the accurate full-time and part-time status of employees under ACA. Employers may experience significant ramifications for misclassifying employees. 

Additionally, employers should familiarize themselves with their requirements under the ACA’s Employer Mandate. For example, employers with 50 or more full-time employees, or ALEs, must:

  • “Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and 
  • Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability.”

Infographic for "Article Review Which Industries are Most Susceptible to ACA Penalties from the IRS?"

For more information, read on for the full article from the ACA Times.

These Industries are Most at Risk for ACA Penalties From the IRS

The home healthcare, staffing, restaurant, and construction industries are under fire from the IRS for failing to comply with the ACA. Organizations within these industries have been shocked to receive ACA penalty notices from the IRS that are in the millions of dollars.

Of course, all types of organizations – hospitality, manufacturing municipal governments, non-profits, and other industries – are receiving IRS penalty notices too. However, the four industries mentioned above seem to be getting more than their fair share.

Here’s why these industries are so susceptible to receiving ACA penalties:

  • HR is often a non-centralized function, making it challenging to gather the data necessary for compliance
  • They have a high percentage of hourly workers with varying schedules, making it difficult to determine who is ACA full-time and requires an offer of health coverage
  • They employ workforces that disproportionately decline offers of health coverage benefits, creating a heavier employer burden in tracking declinations
  • Employees come and go during the year with high staff turnover rates, increasing the employer’s burden to track all such employees
  • Per diem piece work and multiple rates of pay complicate the determination of pay rates and affordability
  • Reliance on payroll systems (or other software programs) that collate data and submit Forms 1094-C and 1095-C often result in a failure to let you know when the data used is inaccurate, which will trigger ACA penalties

Determining the accurate full-time and part-time status of employees under the ACA is arguably the first, and most important, step for ACA compliance. There are real ramifications for inaccurately classifying employees. 

Under the ACA’s Employer Mandate, ALEs, or employers with 50 or more full-time employees and full-time equivalent employees to:

  • Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and 
  • Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability

ALEs that fail to comply with these requirements can be subject to Internal Revenue Code (IRC) Section 4980H penalties.

For example, let’s look at an employer that improperly classifies an employee as not full-time and does not make an offer of insurance. That employee goes to a government marketplace exchange to purchase health insurance and receives a Premium Tax Credit (PTC) that helps subsidize the cost of the health insurance purchased on the exchange. This can trigger the issuance of an IRS Letter 226J penalty notice under IRC 4980H. 

The penalty assessment will be applied to every full-time employee working for that employer during the course of the tax year, not just the employee obtaining the PTC. For the 2022 tax year, that penalty could be as high as $275,000 for every 100 employees.

The first step in the full-time status evaluation is determining which measurement method is best for your organization.

For organizations made up primarily of variable-hour employees, you will want to implement the Look-Back Measurement Method. If your workforce has mostly full-time employees and non-varying schedules, the Monthly Measurement Method will be best.

The most expedient step for employers is to get your ACA Vitals score. This will help determine your risk of receiving IRS penalties by analyzing your unique workforce composition.

Such a review can reap dividends by helping employers avoid significant ACA penalties from the IRS, particularly if those organizations have not been filing ACA-required information annually with the IRS. These organizations should file this information as soon as possible to avoid receiving an IRS penalty notice and to minimize potential penalties. 

The IRS is currently issuing warning notices to employers identified as having failed to file and furnish Forms 1094-C and 1095-C for the 2019 tax year via Letter 5699. If you have received one, contact us to have the penalty reduced or eliminated. We’ve helped our clients prevent over $1 billion in ACA penalty assessments.

If you are part of the home healthcare, personnel staffing, restaurant and construction industries, or any industry that relies on a significant mix of full-time and part-time employees, you are at serious risk of being penalized for not complying with the ACA.

We see daily how the IRS is enhancing its methods for identifying employers that are not complying with the ACA and sending them penalty notices. 

We regularly see the surprise and shock expressed by organizations that receive these penalty notices, many of them containing significant penalty assessments. 

We also see how these organizations could have avoided these penalty assessments by receiving help from experts that understand ACA and IRS regulatory requirements and know how to successfully meet those regulatory requirements.

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.

Although you’ve likely heard of Obamacare, you may not know that Obamacare is synonymous with the Affordable Care Act. This healthcare law that passed in 2010 goes by a few different names. You may also see this law referenced as PPACA or ACA (the acronym for Affordable Care Act).

Below, let’s discuss what Obamacare or the ACA covers, its goals, when you can enroll, and more.

What Do Obamacare and the Affordable Care Act (ACA) Cover?

The Affordable Care Act was designed with three primary goals. To:

  • Make affordable health insurance available to more people…
  • Expand the Medicaid program to cover all adults with income below 138% of the FPL
  • Support innovative medical care delivery methods designed to lower the costs of health care generally.”

Additionally, there are sections of the ACA designed to help patients have access to affordable benefits. These sections include:

  • Quality, Affordable Healthcare for All Americans
  • The Role of Public Programs
  • Improving the Quality and Efficiency of Healthcare
  • Prevention of Chronic Disease and Improving Public Health
  • The Difference Between the ACA and Obamacare
  • Healthcare Workforce
  • Transparency and Program Integrity
  • Improving Access to Innovative Medical Therapies
  • Community Living and Assistance Services and Supports Act (CLASS Act)
  • Revenue Provisions
  • Reauthorization of the Indian Healthcare Improvement Act

From these sections came the 10 essential benefits that are included in minimum essential coverage (Minor Medical), which is defined as “any insurance plan that meets the Affordable Care Act requirement for having health coverage.”

These 10 benefits include:

  • Prescription drug coverage
  • Pediatric services
  • Preventative, wellness services, and chronic disease management
  • Emergency services
  • Hospital-stay coverage
  • Mental health and addiction services
  • Pregnancy, maternity, and newborn care
  • Ambulance patient services
  • Laboratory services
  • Rehabilitative and habilitative services and devices

Why Was This Healthcare Law Created?

Obamacare was designed to provide basic and affordable coverage for all Americans. Before Obamacare, those with pre-existing conditions could be refused coverage or charged more for their plan.

Obamacare ensures that insurance companies allow those with pre-existing conditions to receive the same care as those without. 

Now, minimum essential coverage plans exist that provide the services required by the ACA while simultaneously being affordable for employers and employees. 

These plans help both parties stay healthy while also avoiding the fines and penalties that come along with not having health insurance (especially for Americans living in states with individual mandates).

After all, minimum essential coverage isn’t a one size fits all service. There are different options and levels to choose from to create a plan best suited for your specific needs.

Learn more by reading our article, “What is Minor Medical and What Does It Cover?

When Can I Enroll in Obamacare?

Open enrollment is the one time of the year when employees can sign up for health insurance or change their health insurance plans.

If you choose not to enroll during the open enrollment period, your options to purchase coverage become limited. Why? You cannot purchase ACA-compliant coverage unless a qualifying event occurs.

Qualifying events include:

  • Loss of a job
  • Move to a new coverage area
  • Birth of a child
  • Loss of existing coverage
  • Family event (i.e. marriage, divorce, or death)

Depending on state requirements, employees can take advantage of open enrollment for the following year starting November 1 until approximately January 15th. Again, open enrollment varies on a state-by-state basis. States like California, for example, extend their open enrollment dates to January 31.

Read on to learn what happens if your employee misses open enrollment.

How does the Individual Mandate Affect Obamacare?

When Obamacare was first implemented, it contained a clause that required Americans to have health insurance. Those who didn’t have health insurance were required to pay a tax penalty. This tax penalty was repealed in 2017. 

However, the individual mandate is still in effect for some states in the U.S. 

Residents living in the following states have implemented individual mandates.

  • California
  • The District of Columbia
  • Massachusetts
  • New Jersey 
  • Vermont
  • Rhode Island

This means that people living in the states mentioned above must have health insurance or face state-mandated tax penalties. Read on to learn more about ACA employer penalties.

At Innovative HIA, our goal is to provide affordable ACA-compliant benefits to our clients. For more information about the plans that we offer or to enroll, get in touch with one of our brokers today.