The Affordable Care Act (ACA)

The federal Patient Protection and Affordable Care Act, commonly called the Affordable Care Act ("ACA"), was passed into law in March 2010. The goal of the ACA is to improve the health insurance systems and to ensure Americans can afford quality health insurance. The ACA provides Americans with better health security by putting comprehensive health insurance reforms in place, including expanding health coverage. The ACA also provides Americans with the stability and flexibility to make informed health choices best suited for their needs.

The ACA applies to employers with fifty (50) or more full-time employees. An employee is considered full-time if he/she works at least thirty (30) hours per week. Employers are allowed to deduct up to nine and one-half percent (9 1/2%) of an employee's salary or hourly wage to help cover the cost of the employee's health insurance premium.

There are three (3) time frames to consider when determining an employee's eligibility and open enrollment. These time frames may be determined in advance by the employer as follows:

  • Standard Measurement Period - a three (3) to twelve (12) month "look back" period to determine if an employee has averaged the required thirty (30) hours per work week.
  • Standard Administration Period - Up to ninety (90) days after the Standard Measurement Period for an employer to determine eligibility and enroll their employees in their health insurance plan.
  • Standard Stability Period - A six (6) to twelve (12) month period following the Standard Administration Period to maintain health insurance coverage for full-time employees. The employee is offered "affordable" minimum essential coverage which meets minimum value. The Standard Stability Period usually occurs between open enrollment periods.

If an employee declines health insurance coverage, he/she is required to sign a Health Insurance Waiver form. if an employer fails to offer their employees affordable health insurance coverage, the employer is subject to a penalty.

The ACA added Section 6056 to the Internal Revenue Code which requires employers with fifity (50) or more full-time employees to file information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offers.

Information reporting under Section 6056 is voluntary for the 2014 calendar year. Reporting will become mandatory in early 2016 with respect to the 2015 calendar year.

Keep in mind the ACA is, and may be, subject to change in the foreseeable future. The ACA is designed to expand and increase consumer protection, emphasize prevention and wellness, improve quality and system performance, expand the health workforce and curb rising health care costs. By complying with the ACA, an employer eliminates the risk of penalties.

If you are unsure if your company is required to comply with the ACA, or would like to receive more information about the ACA compliance, please contact Creative Business Solutions. We would be pleased to assist you with all of your compliance needs.


"Guide to the Affordable Care Act", Mize, Houser and Company

"Affordable Care Act",

Internal Revenue Service,

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