For clients using isolved for Affordable Care Act (ACA) compliance, take steps now to prepare for year-end by ensuring your ACA configuration is complete and correct by Nov. 15, 2024. Review your employee statuses, benefit elections, and ACA measurements to prepare for year-end
1- Determine if you are considered an Applicable Large Employer (ALE) for the 2024 ACA reporting year.
If 50 or more full-time or full-time-equivalent (FTE) employees worked for your organization in the 2023 calendar year, you are considered an Applicable Large Employer (ALE) and must provide ACA-compliant health insurance and report affordability and coverage in 2024.
You can use ACA reports in isolved People Cloud™ to determine your ALE status if you have pay history for 2023.
- To run ACA reports, navigate to My Reports and set your Report Category to Benefits – Affordable Care Act and click Filter.
- To determine if you qualify as an Applicable Large Employer (ALE) for the 2024 ACA reporting year, select the ACA Large Employer Compliance Test report.
- Since ALE status is based on your full-time equivalent employee count in the prior year, run the report for 1/1/2023 – 12/31/2023.
- Verify the counts and employee hours history.
- If you averaged 50 or more full-time and full-time equivalent (FTE) employees in 2023, you are considered an Applicable Large Employer (ALE).
2- Ensure the right codes are selected for accurate ACA hours of service measurement.
isolved accumulates hours of service each payroll for ALE reporting and ACA measurement. Compare the Employee Hours by Month section of the ACA Large Employer Compliance Test report to your Payroll Register Export by Date Range to ensure the right earning and memo codes are counted.
If you are a client user with the Client Maintenance or View Client Base roles, you can navigate to Client Management > Payroll > Accumulators and view the ACA-Eligible Hours accumulator to see which earning and memo codes are included.
Refer to the IRS Identifying full-time employees guidance to understand which earnings and memo calculations to include as hours of service in ALE and FTE measurements.
3- Review ACA and benefit configuration.
For the system to generate accurate ACA forms for your employees at year-end, your benefit and ACA configuration in isolved People Cloud must be complete and current. Review the following areas to be sure you’re ready for 1095 form generation:
a. Medical benefit plan configuration
- Medical benefit plans offering minimum essential coverage for minimum value must be configured to cover all months in the 2024 calendar year.
- Medical benefit plans must have accurate employee and employer monthly premium costs for Employee Only coverage on the Rates tab for 2024. Those costs are used to determine if the coverage met ACA affordability standards. If the coverage was too expensive or only met affordability standards using a safe harbor method, they will be included on Line 15 of the ACA 1095-B and 1095-C forms. The system uses the lowest employee only premium cost for health insurance plans they’re eligible for with the Minimum Essential Coverage and Minimum Value boxes checked
- Medical benefit plans must have eligibility rules that accurately define which employees were offered coverage under those plans. Eligibility rules should include employees who qualify as full time under ACA rules even though they were hired as part time.
Client users with the Client Benefits role can view benefit plan configuration and run the Eligibility reports from the Options tab to confirm all employees who were offered health insurance coverage are listed.
b. Annual ACA measurement and reporting cycles
4- Review employee statuses and employment categories.
- ACA 1095-B and 1095-C forms will automatically code
5- Determine if you are fully-insured or self-insured.
Did you offer health insurance provided by an insurance carrier, or were your group health partially or fully self-funded?
If you contracted with an insurance company to provide health insurance to your employees, the insurance company takes on the responsibility for providing minimum essential coverage details to the IRS in annual ACA reporting. Your health insurance provider will file 1095-B, Health Coverage forms to the IRS since they are the coverage provider.
Sponsors of self-insured group health plans have reporting requirements under the Affordable Care Act (ACA), even if they are not large enough to qualify as an ALE. If your medical plan is fully or partially self-funded and you are too small to qualify as an ALE, you or your third-party administrator must provide additional details to employees and the IRS in ACA filings.