2023 ACA Planning – Recommendations for Employers
Applicable large employers (any company or organization that has an average during the prior year of at least 50 full-time employees or “full-time equivalents” is considered an ALE for the current calendar year) must adhere to the Affordable Care Act (ACA) rules to remain compliant regarding group health plan offerings. For purposes of the Affordable Care Act, a full-time employee is someone who works at least 30 hours per week. Here are some reminders as you plan for filing in 2023:
1. Calendar the Form 1094-C/1095-C Deadlines Now
- For 2022 reporting, ALE’s must issue annually individual statements to full-time employees no later than March 2, 2023.
- ALE’s must file applicable reports with the IRS by no later than February 28, 2023, if filing by paper or no later than March 31, 2023, if filing electronically (which is mandatory for ALE’s filing more than 250 forms).
2. Adjust to the Lower Affordability Threshold
- The ACA bases affordability on an employee’s household income and indexes the percentage annually for inflation. For 2023, the affordability threshold is 9.12%, down from 9.61% in 2022. ALE’s preparing for 2023 should be aware that this change will affect how much you can charge employees for health coverage.
3. Make sure you are using the Current ACA Reporting Forms
- Check the IRS website to ensure you are using the correct forms. The IRS continues to be less lenient with basic reporting errors, and confusion regarding the forms could cause costly reporting errors.
4. Employer Shared Responsibility Payment Penalties Continue to Rise
- The rising costs of A penalty (failing to offer group health coverage to at least 95% of full-time employees) and B penalty (offering coverage that is either unaffordable or does not meet the ACA’s minimum value standard) should incentivize employers to re-examine your group health plan offerings.
Start planning early and review your draft forms well in advance to avoid administrative headaches and steer clear of costly penalties.