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Is Your Business ACA Compliant?

June 18, 2015

Does your business need to pay for employee healthcare under the Affordable Care Act (ACA)? Most small businesses in the U.S. employ less than 50 workers and are currently exempt from the Employer Shared Responsibility (ESR) provisions under ACA. However, for large businesses that employ 50 or more full-time employees, the ESR will require you to offer minimum healthcare coverage to 70 percent of your full-time employees in 2015 and 95 percent of your full-time employees beginning in 2016. According to the ACA, a full-time employee is defined as an individual who works at least 30 hours per week or 130 hours per month. Hours of service include any paid hours for actual work performed, vacation, holiday, sick time, or any other leave of absence for which the employee is paid. Large employers must track each employee's status as full-time or part-time, report each employee's status monthly to the IRS for determining employer compliance with the ESR, and keep a history of each employee's status. Companies that fail to comply with the ESR requirements will be required to make a calculated payment to the IRS.

More information on Employer Shared Responsibility Provisions under the Affordable Care Act can be found on the IRS website.

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