Learn about the Affordable Care Act and Employer Mandates.
A number of provisions have been enacted since the signing of the Affordable Care Act in 2010. However, none are more specific to business owners than the Employer Mandates that went into effect January 1, 2015.
What are the Employer Mandates?
Under the Affordable Care Act (also known as ObamaCare), employers with 50 or more full-time employees and equivalents are considered Applicable Large Employers (ALEs).
ALEs are required to comply with both of the following mandates:
- Offer insurance to qualifying full-time employees and their dependents (known as the Employer Shared Responsibility Payment Mandate)
- Report to the IRS on the insurance coverage offered (or not offered) to those qualifying full-time employees* (known as the Employer Information Reporting Mandate).
This information is reported using Form 1094-C & Form 1095-C.
No employer with fewer than 50 full-time employees and equivalents is subject to these mandates.
|Note All employers who provide self-insured health coverage, regardless of size, must file information returns for covered individuals.|
Form 1094-C and Form 1095-C
The Affordable Care Act requires ALEs to file Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage, with the IRS by February 28 (for paper forms) or April 1 (for e-filed forms). This form reports as a summary, the employees, and the type of coverage offered throughout the year by the ALE.
ALEs are also required to issue Form 1095-C, Employer-Provided Health Insurance Offer & Coverage, to full-time employees by January 31, 2021, to March 2, 2021. This form reports on the individual coverage offered by the ALE.
If you file 250 or more Forms 1095-B or Forms 1095-C, you must file them electronically with the IRS.
For help in understanding upcoming deadlines, review IRS instructions for Forms 1095-B and 1095-C.
|Warning Because of the HR and benefits information needed to complete these forms, Intuit Payroll Services does not support either form.|
Determine ALE status
As an employer, each year, you determine your ALE status for the upcoming year based on current-year employee information. For example, if you had 50 full-time employees (including full-time equivalents) in 2019, you are considered an ALE for 2020.
To determine your ALE status, you need to account for service-hours for your entire workforce (full-, and part-time employees, including seasonal employees). Generally, if you have 50 full-time employees, or a combination of full-time and part-time employees that is equivalent to 50 full-time employees, you are considered an ALE.
Determine employee status
As an employer, you are instructed to use the monthly measurement method to determine workforce size, and also to identify full-time employees who are eligible for a health care offer.
You can do so by counting the employee's hours of service for each month, across the months of the current year.
The IRS defines:
- Hours of Service: Each hour for which an employee is paid, or entitled to payment (vacation, sick, holiday, disability, layoff, jury duty, military duty, or leave of absence)
- Full-time employee: Any employee working an average of 30 hours or more per week for more than a 120 days in a year, or 130 hours per calendar month
- Full-time equivalent (FTE): Any employees who are not considered full-time employees in any given month, who work less than 30 hours per week or 120 hours per month, but who, in combination, are counted as the equivalent of a full-time employee
- Seasonal employee: Any employee who works 120 days or less during a calendar year
Seasonal workers are taken into account when determining the number of full-time employees. However, if your workforce exceeds 50 full-time employees (including full-time equivalents) for 120 days or fewer during a calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal workers, you are not considered an Applicable Large Employer.
Need help determining your full-time employee count? BusinessUSA.gov offers a great employee calculator to help determine your full-time employee count. You can launch it here.
How Can Intuit Payroll Services Help?
Determining who your full-time employees (and equivalents) are, is the first step to identifying your ALE status.
You can find payroll information such as employee contact information and service-hour reports from your payroll account. Select the section for your Intuit Payroll Service version and review the steps for complete details.
Questions and answers about Employer Mandates
Check out the following sections for answers to frequently asked questions about Employer Mandates.