ACA Compliance Unlocked: Vital Insights from Ev. Proc. 2024-14

ACA Compliance

At Brookshire Benefits, we understand the complexities of navigating the ever-evolving landscape of healthcare regulations, particularly those outlined in the Affordable Care Act (ACA). In light of this, we aim to provide you with crucial insights derived from Ev. Proc. 2024-14, shedding light on the indexing adjustments affecting employer shared responsibility payments under the ACA.

Applicable Large Employers (ALEs): ALEs, defined as entities with at least 50 full-time employees (including full-time equivalent employees) in the preceding calendar year, are subject to specific ACA requirements.

Employer Shared Responsibility Payments: Understanding the penalties outlined in Code § 4980H(a) and Code § 4980H(b) is paramount for ALEs:

  • Code § 4980H(a): A penalty is triggered if ALEs fail to offer minimum essential coverage to 95% of full-time employees, with at least one employee receiving subsidized coverage through an Exchange.
  • Code § 4980H(b): A penalty applies if coverage offered by ALEs is deemed unaffordable or fails to provide minimum value, and at least one full-time employee receives subsidized coverage through an Exchange.

Adjusted Penalty Amounts for 2025: Ev. Proc. 2024-14 outlines the adjusted penalty amounts for 2025:

  • Code § 4980H(a): $2,900 per full-time employee (with a 30-employee reduction).
  • Code § 4980H(b): $4,350 per full-time employee receiving subsidized coverage through an Exchange.

Changes from 2024: Compared to 2024, there have been slight decreases in penalty amounts:

  • A decrease of $70 for penalties under Code § 4980H(a).
  • A decrease of $110 for penalties under Code § 4980H(b).

Avoiding Penalties: Employers can mitigate penalties by ensuring they offer minimum essential coverage that is both affordable and of minimum value to full-time employees. Regularly identifying full-time employees is imperative in this regard.

Response to IRS Notices: In the event of IRS notifications regarding potential penalties under Code § 4980H(a) or § 4980H(b), employers typically have 30 days to respond. It is crucial for employers to promptly and comprehensively address these notices to avoid further complications.

Understanding and Compliance: Comprehending and adhering to these regulations is essential for employers to fulfill their responsibilities under the ACA and sidestep potential penalties.

At Brookshire Benefits, we are committed to assisting you with ACA Compliance regulations. As a hands-on full-service insurance brokerage, we offer tailored solutions to meet your specific needs, ensuring peace of mind and regulatory adherence.

Stay informed, stay compliant, and let Brookshire Benefits be your guide in navigating the intricate realm of healthcare regulations. For any questions, please feel free to call us anytime!

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