While there have been changes to the ACA, many provisions continue to be in effect and failure to comply with the regulations may result in penalties. The information below is current as of May 2020. Below are provisions that could affect your company.
- Applicable Large Employer (ALE) Designation—Companies with a monthly average of 50 or more full-time equivalent employees (FTEs) during the previous calendar year are considered ALEs, and are subject to certain ACA regulations.
- For companies with shared ownership, ALE status is determined by aggregating the FTE count of all companies within the controlled group. If the entire controlled group had 50 or more FTEs during the previous calendar year, ALL of the companies within the controlled group are ALEs and should certify their ALE status independently during the TriNet ALE designation process. If you have questions about your ALE designation, contact your legal or tax advisor.
What this means for you:
- If your company is an ALE, you must submit an ALE designation to TriNet. If you have not accurately designated your ALE status for 2020 (or you did not designate the ALE status for ALL of the companies you represent), contact your TriNet Customer Experience Contact to make this important update.
- Benefits Eligibility – You should classify worksite employees scheduled to work a minimum of 30 hours weekly (on average) as “full-time employees” who will be eligible for TriNet benefits. During the Benefits Investment Strategy period, all customers should review worksite employees’ employment classifications to ensure accurate benefits eligibility.
- If your company is an ALE, ensure worksite employees that are working 30 or more hours per week are classified as full-time in order to avoid potential ACA penalties.
- Employer Shared Responsibility Mandate—All ALEs are required to offer medical coverage to at least 95% of full-time worksite employees to avoid potential penalties.
- If your company has designated as an ALE and your company contribution strategy isn’t already compliant with the ACA’s affordability requirement, worksite employees will see a medical plan option with an employee-only coverage level contribution rate that meets the ACA’s requirements for affordable coverage using the Federal Poverty Level (FPL) safe harbor.
- In order to meet the 2020 Federal Poverty Level (FPL) safe harbor and avoid potential penalties,
- You will need to offer at least one plan available to all worksite employees, and
- You will need to fund enough so that the maximum amount a worksite employee will pay does not exceed $103.99 per month (for the employee-only coverage level).
- TriNet utilizes the FPL affordability safe harbor formula. FPL is determined by the IRS and for 2020 is 9.78 percent of the prior year's federal poverty level ($12,760) divided by 12, or $103.99 per month.
- If your company has not designated as an ALE, the worksite employee contribution rate for all medical plan options will be based on the Benefits Investment Strategy you select. The Employer Shared Responsibility provision applies to ALEs at the start of each calendar year, regardless of when the company’s benefits plan year begins.
- Section 6056 Reporting Requirements – All companies that are ALEs for the 2020 calendar year are subject to the annual Section 6056 reporting requirements. As part of the TriNet ACA solution, if you submit an ALE designation to TriNet, we will coordinate the following on your behalf:
- Filing Form 1094-C with the IRS
- Sending Forms 1095-C directly to worksite employees home addresses on file
For more information about the ACA , visit TriNet.com/affordablecareact or contact your TriNet Customer Experience Contact.