Review Offers of Coverage After OE

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Under the Affordable Care Act (ACA), applicable large employers (ALEs)—those with 50 or more full-time employees, including full-time equivalent employees—are required to offer affordable health coverage that meets the minimum value standard to all their full-time staff. This mandate aims to ensure that employees have access to necessary health benefits, and failing to comply can lead to substantial penalties.

Post-open enrollment period is a critical time for HR professionals to review the actions taken during open enrollment to verify compliance with these requirements. It’s essential to audit the coverage offered to ensure that every full-time employee was given the opportunity to enroll in a qualifying health plan.

Employers should double-check their employee roster against those who were offered and who have accepted the coverage. Special attention should be given to new employees who might have become eligible and existing employees whose status might have changed during the year, affecting their eligibility.

Employers should also be aware of the penalties for failing to comply with the ACA’s employer mandate. There are two types of penalties: the section 4980H(a) penalty for failing to offer coverage to substantially all (95%) full-time employees, and the section 4980H(b) penalty for offering coverage that either is not affordable or does not provide minimum value. These penalties can be severe, emphasizing the importance of careful review and management of health benefits offered to employees.

By ensuring all full-time employees are offered appropriate health coverage, employers can avoid future tax penalties and compliance problems.