Perhaps one of the more complex pieces of the ACA compliance equation is the affordability safe harbor provisions.
At its simplest, coverage is considered affordable if the premium constitutes less than 9.5% of the household income of an eligible employee. Since this calculation takes into account the take home pay for spouses, it is often difficult (if not impossible) for a large employer to make this calculation, so the IRS has provided 3 alternative calculations that they refer to as affordability safe harbors.
Continue reading Part 4 – Determine Which Affordability Safe Harbor to Use
The Affordable Care Act mandate specifies that employers must offer a majority of their employees affordable health coverage. For tax year 2015, you’ll need to calculate whether 70% of your full-time employees were covered. If you haven’t offered 70% of your eligible employees with affordable healthcare coverage, you may be subject to fines.
Continue reading Part 3 – Prepare for Employer Shared Responsibility
The next step you’ll want to take to prepare for ACA reporting is to identify full-time employees for each month. You’ll want to be very careful with this calculation as the IRS is very specific with how it counts full-time employees.
Continue reading Part 2 – Identify Full Time Employees