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Affordable Care Act Information

Affordable Care Act Information

The Patient Protection and Affordable Care Act (PPACA) was enacted on March 23, 2010 and then amended on March 30, 2010 by the Heath Care and Education Reconciliation Act. The final version of the law is often referred to as the ACA.

The ACA requires every employer with 50 or more Fulltime Equivalents, referred to as an Applicable Large Employer or an ALE, to offer affordable health coverage to Qualified Fulltime Employees.  This coverage offering must meet or exceed minimum effective coverage and minimum value standards.

If an ALE fails to offer or chooses not to offer affordable coverage meeting these standards to at least 95% of their qualified fulltime employees, they are subject to paying an Employee Shared Responsibility Payment (ESRP). Or, if a fulltime employee successfully meets the criteria to obtain coverage via the healthcare exchange (healthcare.gov) and successfully qualifies for a government subsidy, the ALE would also be subject to an ESRP. 

A fulltime employee would only qualify for a government subsidy if they were not offered coverage, or the coverage they were offered was not affordable or did not provide minimum value or minimum effective coverage. By statute, all State Health Plan offerings for qualified fulltime employees meet or exceed the ACA thresholds. By following the Plan's coverage guidelines, employers will be ACA compliant, given that they adequately identify their qualified fulltime employees and offer them coverage.

To monitor compliance with the ACA, the IRS code was modified to require ALE’s to report their coverage offerings on forms 1094-C and 1095-C each calendar year. This information is sent to both the IRS and the qualifying fulltime employee.  The IRS receives both forms while the employee receives the 1095-C.

The ACA also requires the IRS to collect information from Providers of Minimum Essential Coverage regarding coverage they provide to their members, and for the Providers to report this information to their members.  This coverage information is reported on forms 1094-B and 1095-B.  The IRS receives both forms while the member receives the 1095-B.  This is an annual reporting requirement for coverage providers.

Self-insured employers are considered the Coverage Provider for their employees.  Therefore, self-insured employers are responsible for the 1094-B and 1095-B reporting.  A self-insured employer who is also an ALE is required to report both as an ALE and as a Provider.  To make the reporting easier, the IRS added a section to the 1095-C where the self-insured ALE can honor their reporting responsibility as a Provider.  This is Part III of the form and it eliminates the need for the self-insured ALE to create both the 1095-C and 1095-B.  The 1094-C also serves both purposes.

All employers offering State Health Plan coverage are self-insured.  This means that all State Health Plan employers must report to the IRS using either forms 1095-B or 1095-C each calendar year.  If you are an ALE, you use form 1095-C, otherwise you use form 1095-B. The appropriate 1094 form is also required.

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