The Affordable Care Act (ACA) introduced a range of compliance requirements for employers. While many of the strictest mandates apply to large employers (50+ full-time equivalent employees), small businesses aren’t completely exempt. Here’s what you need to know.
The Employer Mandate
The ACA’s employer shared responsibility provision (often called the employer mandate) only applies to Applicable Large Employers (ALEs) — businesses with 50 or more full-time equivalent (FTE) employees. If you have fewer than 50 FTEs, this mandate does not apply to you.
However, if you’re approaching 50 employees, it’s worth planning ahead — the compliance requirements that kick in at 50 are significant.
What Applies to ALL Employers
Regardless of size, if you offer group health coverage, your plan must:
- Cover preventive care at no cost to employees (no deductible or copay)
- Not have annual or lifetime dollar limits on essential health benefits
- Allow adult children to stay on parent’s plan until age 26
- Not deny coverage based on pre-existing conditions
- Provide a Summary of Benefits and Coverage (SBC) to enrollees
- Comply with HIPAA privacy requirements
COBRA Requirements
Employers with 20 or more employees must offer COBRA continuation coverage when employees lose coverage due to qualifying events. Smaller employers may be subject to state “mini-COBRA” laws.
Section 125 Plans
If you allow employees to pay their share of premiums with pre-tax dollars (which saves both the employer and employee on payroll taxes), you need a Section 125 plan document on file. Many employers do this without realizing they need the legal document — an audit risk.
Open Enrollment Is a Good Time to Audit
Use open enrollment as a trigger to review your compliance documentation. Are your plan documents up to date? Do you have an SBC on file? Is your Section 125 document in order?
Garden State Benefits helps employers stay compliant year-round. Contact Paul with any compliance questions.