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.
Open Enrollment
HR Alert: Review Employee Cost Sharing During Open Enrollment
Keeping employee premiums steady in 2024 may not be sufficient to avoid ACA penalties.
HR professionals should take note of IRS Revenue Procedure 2023-29, as it signifies a significant development regarding Affordable Care Act (ACA) compliance. The ACA’s affordability threshold for 2024 has been lowered to 8.39%, down from 9.12% in 2023.
This adjustment holds substantial implications for employers subject to the ACA employer mandate. It potentially reduces the minimum cost at which a self-only coverage option must be accessible within a group health plan to avoid potential penalties for the employer.
HR teams must proactively assess cost-sharing arrangements and consider adjustments to cost designs for the upcoming 2024 plan year to ensure compliance with the revised threshold.
ACA Safe Harbor
- Federal Poverty Line Safe Harbor: Employers using the FPL safe harbor to determine affordability should note that the premium for single only coverage must be $101.94/month or less for employees in 2024. This is a decrease from the $103.28/month in 2023.
- Rate of Pay: Employers using the Rate of Pay safe harbor will use a calculation taking into account 8.39% of monthly wages. This is a decrease from 2023.
- W-2: For 2024, the maximum contribution is 8.39% of W-2 wages.
This adjustment necessitates a careful review of premium cost-sharing structures to ensure compliance with the revised ACA affordability threshold for the 2024 plan year. Not raising employee cost-sharing in 2024 may not be enough to avoid ACA penalties. Stay informed to avoid potential penalties and maintain legal compliance.
Benefit Allocation Systems (BAS) provides online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.
MyEnroll360 integrates with major insurance carriers for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and others), and with leading payroll platforms for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and others).
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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