Despite the numerous changes to the Affordable Care Act (ACA), applicable large employers (ALE) must still provide group health benefits to their employees. These benefits must meet at least the minimum standard as set by the federal government or the employer will be required to pay a penalty.
An ALE is a company that has at least 50 full-time employees (those who work at least 30 hours per week) and full-time equivalent employees (FTE). That means part-timers count in this calculation. Total part time hours worked in the company divided by 120 gives FTE equivalents.
Penalties will be levied when the ALE:
Receives a premium tax credit and/or cost-sharing reduction after enrolling in coverage on the ACA Marketplace.
The 2021 penalties include:
Employers who have difficulty meeting these requirements can seek group health plans that help them avoid the penalties while still providing employees with some level of group health plan coverage. For instance, Allied National offers the Minimum Essential Coverage Plan (MEC) which covers the cost of federally mandated preventive services at 100% of eligible charges. This plan satisfies the ACA employer mandate to provide minimum essential coverage and eliminates the Part A penalty for applicable large employers.
If your company has fewer than 50 full-time equivalent employees, this mandate and tax penalty do not apply to you. However, offering health benefits to your employees is a great way to recruit and retain employees. In fact, we wrote a blog on this topic. Check out How to Keep Your Small Business Employees Happy and Healthy with Robust Benefits.
Founded in 1970, Allied is one of the nation's oldest and most experienced third-party administrators. Allied National is a 90 Degree Benefits Company, a subsidiary of Blue Cross Blue Shield of Alabama. As the small group benefit experts, Allied works with small business employers to provide unique and affordable group health benefits
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Allied National is a 90 Degree Benefits Company, a subsidiary of Blue Cross Blue Shield of Alabama. Founded in 1970, Allied National is one of the nation's oldest and most experienced third-party administrators. We're the small group benefit experts working to provide unique and affordable group health benefits to small business employers.