What's the difference between a fully-insured and a self-funded health plan?

In a fully-insured plan, the business pays a fixed premium to a carrier, who assumes all financial risk for claims. In a self-funded plan, the business pays employee claims directly through a third-party administrator and buys stop-loss insurance to cap worst-case risk, gaining more control over plan design and potential cost savings. Most businesses under 50-100 employees do better with a fully-insured plan.

When can an employee add a dependent outside of open enrollment?

Only with a qualifying life event such as marriage, divorce, birth or adoption of a child, loss of other coverage, or a change in employment status. The employee typically has 30 days from the event date to notify HR and submit documentation.

What is HSA/HDHP compliance and why does it matter?

To contribute to a Health Savings Account, an employee must be enrolled in a qualified High-Deductible Health Plan that meets IRS minimum deductible and maximum out-of-pocket limits. A plan that doesn't meet these limits can disqualify HSA contributions retroactively, creating tax issues for employers and employees.

Does my business need to file ACA reporting (Forms 1094-C/1095-C)?

ACA reporting is generally required for Applicable Large Employers with 50 or more full-time equivalent employees in the prior year. Businesses under that threshold usually aren't required to file, though other state-level reporting rules may still apply.

What's the difference between a qualifying life event and a special enrollment period?

A qualifying life event is the triggering circumstance, such as marriage, birth, or job loss. A special enrollment period is the window of time that event opens up for making plan changes. Both group health plans and ACA marketplace plans use this framework, though deadlines and documentation requirements can differ.

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Let us help you with ACA reporting, keeping in compliance.

Q: Does my business have to file ACA reporting (Forms 1094-C and 1095-C)?

Generally, yes, if you're an Applicable Large Employer with 50 or more full-time equivalent employees during the prior calendar year. If you're under that threshold, federal ACA reporting usually isn't required, though some states have their own individual mandate reporting rules.

Q: What does "affordable" mean under the ACA, and how is it measured?

Coverage is affordable if the employee's required contribution for the lowest-cost, minimum-value self-only plan doesn't exceed an IRS-adjusted percentage of household income. Since employers don't typically know full household income, the IRS provides three safe harbor methods based on W-2 wages, rate of pay, or the federal poverty line.

Q: My employee count is close to 50, how do I know for certain if I'm an Applicable Large Employer?

Applicable Large Employer status is based on a lookback measurement of the prior calendar year's average monthly full-time equivalent employee count, not current headcount. A business that grew past 50 employees mid-year may not be an Applicable Large Employer until the following year. It's worth having a broker or accountant run the actual lookback calculation rather than estimating from current headcount.

Employer Benefits ACA Reporting for Businesses

As part of our Employee Benefits services, Mountainside Insurance Management offers businesses assistance with reporting requirements for employer-sponsored health insurance programs under the Affordable Care Act (ACA). We can help businesses minimize risks, avoid penalties, and achieve 100% compliance.

We will go over all the requirements with you. It’s important to note that significant penalties apply for incorrect or incomplete information. Also, small employers with fewer than 50 full-time employees are exempt from most ACA reporting requirements, but not all, according to the IRS. Our staff can review this with you, as well.

Ensure ACA Reporting Compliance

Employers with 50 or more employees are required to report to the IRS the cost of healthcare coverage under an employer-sponsored plan on the employees’ W2 forms. Information must include:

Employer’s name, address and identification number;
Name and phone number of the employer’s contact person (which can be a
third party);
Calendar year for which the information is reported;
Certification as to whether the employer offered its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an employer-sponsored plan, by calendar month;
Months in which minimum essential coverage under the plan was available;
Each full-time employee’s share of the lowest-cost monthly premium (self-only) for coverage providing minimum value by calendar month;
Number of full-time employees by calendar month;
Name, address, taxpayer identification number of each full-time employee (but not dependents or others covered through employee) and the months, if any,
during which the employee was covered under the plan; and
Any other information required by the IRS

Frequently Asked Questions About Employer Health Benefits

Does my business have to file ACA reporting (Forms 1094-C and 1095-C)?

Generally, yes, if you're an Applicable Large Employer (ALE) — defined as having 50 or more full-time equivalent employees during the prior calendar year. Full-time equivalents are calculated by combining your full-time employees (30+ hours/week) with a prorated count of part-time hours. If you're under that threshold, federal ACA reporting usually isn't required, though some states have their own individual mandate reporting rules that can apply regardless of employer size.

What's the difference between Form 1094-C and Form 1095-C?

Form 1095-C is the individual statement sent to each full-time employee, showing what health coverage was offered to them and their dependents each month of the year. Form 1094-C is the transmittal summary filed with the IRS, reporting aggregate information about the employer and confirming the 1095-Cs were distributed. Think of 1095-C as the employee-facing copy and 1094-C as the IRS-facing cover sheet.

What happens if my business doesn't file ACA reports, or files them late?

The IRS can assess per-form penalties for each 1095-C that's missing, late, or contains incorrect information, and these penalties scale with how late the correction is made and how many employees are affected. There are also separate Employer Shared Responsibility Payment (ESRP) penalties if an ALE failed to offer affordable, minimum-value coverage to enough full-time employees and at least one of them received a premium tax credit through the marketplace. Both penalty types can apply simultaneously, so timely, accurate filing matters even for employers who believe they're in compliance.

What does "affordable" mean under the ACA, and how is it measured?

Coverage is considered affordable if the employee's required contribution for the lowest-cost, minimum-value self-only plan doesn't exceed a percentage of their household income, which the IRS adjusts annually. Since employers typically don't know an employee's full household income, the IRS provides three safe harbor methods — based on Form W-2 wages, rate of pay, or the federal poverty line — that employers can use instead to demonstrate affordability.

When are ACA reporting deadlines, and can they be extended?

Form 1095-C must generally be furnished to employees by early March, and 1094-C/1095-C filings are due to the IRS by the end of March if filing electronically (required for most employers with 10 or more returns), or by the end of February if filing on paper. The IRS has at times provided automatic extensions for furnishing employee copies, but filing deadlines with the IRS itself are stricter and may require a formal extension request submitted before the original due date.

My employee count is close to 50 — how do I know for certain if I'm an ALE?

ALE status is based on a lookback measurement of your prior calendar year's average monthly full-time equivalent employee count, not your current headcount. This means a business that grew past 50 employees mid-year may not be an ALE until the following year, and a business that dipped below 50 doesn't lose ALE status immediately either. Given how this calculation interacts with seasonal staffing and part-time hours, it's worth having your broker or accountant run the actual lookback math rather than estimating based on a current employee count.

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