Now that the year is more than halfway over, organizations across industries are starting to look at adjustments that may affect their employee benefits in the coming year.
One of those upcoming adjustments for 2024 is the out-of-pocket maximums and projected employer mandate penalties under the Affordable Care Act (ACA).
As you gear up for 2024, keep this information handy.
A Quick Review of the ACA
The Affordable Care Act (also referred to as Obamacare) is a healthcare reform law enacted in 2010 that makes health insurance coverage affordable and available to more people, expands Medicaid, and seeks to lower the cost of healthcare by supporting innovative medical care delivery methods.
The ACA mandates certain employer-sponsored coverage responsibilities and benefits that depend on the structure and size — i.e., the number of full-time employees and full-time equivalents — of the business.
If you have 50 or more full-time employees or full-time equivalents, your business is considered an Applicable Large Employer (ALE). Two provisions of the ACA apply only to ALEs: 1) the employer shared responsibility provisions, and 2) employer information reporting for offers of minimum essential coverage. Note: non-ALEs that sponsor self-insured group medical plans are also required to report offers of minimum essential employee coverage.
The first provision means you need to offer minimum essential health care coverage to your full-time employees and their dependents or make an employer shared responsibility payment to the Internal Revenue Service (IRS) — also referred to as the “employer mandate penalty” — if you fail to provide coverage.
The second provision means you also have to send annual reports to the IRS about the health care coverage you offered if any — and send a statement to employees with the same information that you provided to the IRS.