ACA Reporting
ACA Compliance Lessons Learned From Recent Reporting Seasons
Common themes emerge when reflecting on recent ACA reporting seasons that can help employers reduce administrative burdens and improve accuracy.
Employers
Employee Coverage Options Through the Marketplace
Section 18B of the Fair Labor Standards Act (FLSA), introduced by the Affordable Care Act (ACA), brings a set of obligations that HR departments must understand.
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For HR professionals, keeping up with evolving healthcare regulations is paramount. Section 18B of the Fair Labor Standards Act (FLSA), introduced by the Affordable Care Act (ACA), brings a set of obligations that HR departments must understand. This article will clarify the requirements outlined in Section 18B.
Understanding ACA Section 18B
ACA Section 18B dictates that applicable employers must furnish employees with written notices about the availability of healthcare coverage options through the Health Insurance Exchanges, also known as Marketplaces. These notices serve to inform employees about their healthcare choices and potential tax credits they may qualify for under the ACA.
Key Components of the Notice
The notice must include the following information:
- Exchange Description: A clear explanation of the services provided by the Exchanges and how employees can contact them for assistance.
- Premium Tax Credit Eligibility: If the employer’s healthcare plan contributes less than 60 percent of the total allowable costs, employees should be informed that they may be eligible for a premium tax credit under section 36B of the Internal Revenue Code if they purchase a qualified health plan through an Exchange.
- Impact on Employer Contributions: Employees purchasing a qualified health plan through an Exchange should be aware that they may lose their employer’s contribution (if any) to the company’s health benefits plan. Additionally, a portion of this contribution may be excludable from federal income tax.
Compliance
The Department of Labor has a sample document employers may use to satisfy the notification requirements. That document may be accessed by clicking here.
Complying with ACA Section 18B is essential for HR professionals to ensure employees receive vital information about their healthcare options through the Marketplace. By distributing the required notice, HR departments can navigate this regulatory landscape effectively, ensuring employees have access to the healthcare information they need.
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This article is for informational purposes only and is not intended as legal, tax, or benefits advice. Readers should not rely on this information for taking (or not taking) any action relating to employment, compliance, or benefits. Always consult with a qualified professional before making decisions based on this content.
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