Payroll 310 Badge #01 - Affordable Care Act (ACA)-Payroll 310 Badge #1

Payroll 310 Badge #1 - PowerPoint

Pdf Summary

The document outlines key Affordable Care Act (ACA) requirements and the payroll professional’s role in ensuring compliance. The ACA (formally the Patient Protection and Affordable Care Act), signed into law March 23, 2010, took effect in 2014 and expanded coverage by requiring insurers to accept applicants regardless of preexisting conditions (with limited age rating) and establishing health insurance exchanges. It defined “minimum essential” benefits (e.g., emergency services, hospitalization, maternity/newborn care, mental health, prescriptions, preventive care, and pediatric services) and allowed dependents to remain on a plan until age 26 (but not dependents of dependents).<br /><br />The curriculum emphasizes employer obligations, especially for Applicable Large Employers (ALEs)—those with 50+ full-time employees (including equivalents). Full-time is generally 30+ hours per week (130 hours/month). Districts must track hours/eligibility, offer benefits to eligible employees, provide required employee forms, and submit annual IRS reporting. Employers must not reduce hours to evade coverage requirements and must ensure coverage is “affordable” based on a percentage of household income (updated annually). Both small and large employers must withhold and report an additional 0.9% Medicare tax on wages over $200,000.<br /><br />Reporting requirements include W-2 health coverage cost reporting (Box 12, Code DD; guidance may separate employer portion vs. employee premiums). ALEs typically file Forms 1095-C (employee statements and IRS reporting) and 1094-C (transmittal/summary). 1095-C uses IRS code series for monthly offers of coverage (Line 14) and employee status/enrollment (Line 16); self-insured plans must also report covered dependents and accurate SSNs/TINs to avoid penalties. Electronic filing is required for 250+ returns via the IRS AIR system. The document also explains correction procedures and IRS penalties for failing to file or furnish correct statements, plus potential “employer shared responsibility” payments if required coverage is not offered or is unaffordable and an employee receives a premium tax credit. Resources and links to IRS guidance are provided.

Keywords

Affordable Care Act (ACA) compliance

Applicable Large Employer (ALE) 50+ full-time employees

Full-time employee definition 30 hours per week 130 hours per month

Minimum essential health benefits

Dependent coverage to age 26

Employer shared responsibility payments

ACA affordability safe harbors household income percentage

IRS Forms 1095-C and 1094-C reporting

W-2 Box 12 Code DD health coverage cost reporting

IRS AIR system electronic filing and penalties