December 15, 2023 By Bob Viñal

Compliance with ACA: What Employers Need to Know About Group Coverage


Ensuring compliance with the Affordable Care Act (ACA) is critical for employers, especially when it comes to offering group health coverage. Understanding the intricacies of ACA regulations not only helps businesses meet legal requirements but also fosters a healthy and protected workforce. Here's a brief overview of what you need to know about group coverage under the ACA.

Mandatory Coverage for Applicable Employers. The ACA mandates that applicable large employers (ALEs), defined as those with 50 or more full-time employees, provide affordable and adequate health insurance coverage to their full-time workforce. Non-compliance may result in penalties.

Essential Health Benefits (EHBs). Group health plans must offer Essential Health Benefits (EHBs), which include a range of services from preventive care to hospitalization. Ensuring that your plan covers these essential services is crucial for compliance.

Affordability and Minimum Value. Employer-sponsored health plans must meet affordability and minimum value standards. The coverage should be reasonably affordable for employees, and it should cover at least 60% of total allowed costs. As of 2024, a job-based healthcare plan is considered "affordable" if the employee's share of the monthly premium in the lowest-cost plan offered by the employer is less than 8.39% of the employee’s household income. Employers failing to meet these criteria may face penalties.

Reporting Requirements. ALEs (those with 50 or more full-time employees) are required to report on the health coverage they offer to employees. This includes filing annual information returns with the IRS and providing statements to full-time employees regarding the health coverage offered. Smaller employers are not held to these same reporting standards. 

Waiting Period Limitations. The ACA restricts the waiting period for health coverage to a maximum of 90 days. Employers must ensure that employees become eligible for health coverage within this timeframe.

Grandfathered Health Plans. Some plans in existence before the ACA's enactment may be considered grandfathered. While these plans are exempt from certain ACA provisions, they must still comply with some requirements to maintain grandfathered status.

Bay Area Health Insurance is here to guide employers through the complexities of ACA compliance. Our team of experts specializes in tailoring group health coverage solutions that not only meet regulatory standards but also prioritize the well-being of your workforce.

For a personalized consultation and assistance in navigating the intricacies of ACA compliance, contact us today. Together, let's build a comprehensive and compliant health coverage strategy that ensures the health and happiness of your employees. Your commitment to their well-being is our priority.

About Author

Bob Viñal

Bob Viñal has been working in the insurance industry for more than 30 years, handling everything from plan design to claims and rating structures.

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