About the Affordable Care Act (ACA)
"The Affordable Care Act contains comprehensive health insurance reforms and includes tax provisions that affect individuals, families, businesses, insurers, tax-exempt organizations and government entities. These tax provisions contain important changes, including how individuals and families file their taxes. The law also contains benefits and responsibilities for other organizations and employers.
The Affordable Care Act includes requirements for employers regarding heath care coverage. The size and structure of your workforce determines your responsibility."
For more information visit www.IRS.gov/Affordable-Care-Act.
The ACA Employer Mandate requires large employers to provide full-time workers with affordable healthcare coverage or face penalties up to $3,000 per employee. The goal is to ensure as many American workers are covered by healthcare plans through their employers as possible. The IRS was originally set to begin enforcing these penalties at the beginning of 2014, but delayed enforcement until 2015.
In July of 2013, the Federal Administration announced a one-year delay in enforcement action against applicable large employers who fail to provide healthcare coverage to their full-time workers. This announcement references an upcoming rule that pushed back the enforcement of the tax penalties associated with the Employer Shared Responsibility provision (i.e., Employer Mandate) to 2015. The individual mandate went into effect on January 1, 2014.
Under the February 2014 update of the Employer Mandate, employers with 100 or more full-time (or full-time equivalent) employees are considered large employers and the above-mentioned requirements apply. Employers with 50 to 99 employees have until 2016 until they are also required to provide full-time workers with affordable healthcare coverage, or face penalties. As before, companies with fewer than 50 employees are not required to provide healthcare coverage. To avoid a payment for failing to offer health insurance coverage, employers subject to the rules in 2015 must offer coverage to 70 percent of their full-time (and equivalent) employees in 2015 and 95 percent in 2016 and beyond.
On April 12, 2016, the IRS issued Revenue Procedure 2016-24 to index the contribution percentages in 2017 for purposes of determining the affordability of an employer's healthcare plan under the Affordable Care Act. For plan years beginning in 2017, employer-sponsored coverage will be considered affordable if the employee's required contribution for self-only coverage does not exceed 9.69% of the employee's household income for the year.
On November 18, 2016, the IRS announced an extension for the due dates to file ACA forms for 2016 (Notice 2016-70). The extends the due date for furnishing the 2016 ACA forms (1095-B, Health Coverage, and the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage) to employees. Previously the date was January 31, 2017, and the new due date is March 2, 2017.