7 Essential ACA Terms

7 Essential ACA Terms You Should Know

As more states begin to pass their own individual mandate, employers are understanding that meeting the Affordable Care Act’s reporting requirements is a complex  process which includes overwhelming terminology. We’ve gathered a glossary of the most essential ACA terms you’ll need to know before filing. 

ACA Information Returns Program (AIR)

Under the ACA, insurance companies, self-insured companies, and large businesses and businesses that provide health insurance to their employees must submit information returns to the IRS reporting on an individual’s health insurance coverage. You are required to file electronically if submitting 250 or more information returns. 

Affordable Coverage

If the lowest-cost self-only health plan is 9.5 percent or less of your full-time employee’s household income, then the coverage is considered affordable, according to the IRS. 

Affordable Care Act (ACA)

A comprehensive health care reform law enacted in 2010, containing important changes including how individuals and families file their taxes. The law also contains benefits and responsibilities for other organizations and employers. 

Applicable Large Employers (ALE)

A company or organization that has an average of at least 50 full-time employees (FTE). For the purposes of the ACA, a full-time employee is someone who works at least 30 hours a week. 

Minimum Essential Coverage

The coverage an individual needs to meet the shared responsibility provision under the ACA. People with minimum essential coverage are considered insured and thus do not have to pay a penalty for being uninsured. 

Minimum Value Coverage

An employer-sponsored plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan. 

Shared Responsibility Provision

Employer mandates under the ACA (Play or Pay Mandate). Under the ACA’s employer shared responsibility provisions, ALEs must either offer minimum essential coverage that is “affordable” and provides “minimum value” to their full-time employees.

Continue Reading:

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.