The IRS’s ACA Compliance Validation (ACV) System is finalized and ready to go. The ACV is the government program that will be checking on employer compliance with the ACA. More than two years in the making, the system is geared up to leverage fines on employers who do not meet the ACA guidelines.
Applicable Large Employers (ALE) will owe employer shared responsibility payment if, for any month, it does not offer minimum essential coverage to at least 95 percent of its full-time employees (and their dependents), and if at least one full-time employee receives the premium tax credit for purchasing coverage through the Marketplace
If an ALE is subject to a employer shared responsibility payment, the annual payment will be $2,260 for each full-time employee (without regard to whether each employee received a premium tax credit), after excluding the first 30 full-time employees from the calculation.
The IRS will determine whether an ALE member owes this payment on a month-by-month basis. So an ALE member who owes the payment will pay $188.83 (1/12 of $2,260) per month per full-time employee.
Part-time employees and full-time equivalent employees do not factor into their calculation. Also, certain full-time employees are not included in this payment calculation, for example, very generally, a full-time employee in a waiting period.
The regulations are extremely complicated and cumbersome. If you need help sorting them out contact BenefitScape at 508-655-3307 benefitscape.com