On June 25, 2015, the United States Supreme Court upheld a key provision of the Affordable Care Act (ACA) in a 6-3 decision, holding that individuals may receive premium tax credits through either a state insurance exchange or the federal insurance exchange.
In light of this decision, employers should be prepared to comply with upcoming requirements mandated by the ACA. Specifically, now that the Supreme Court has clarified that individuals in every state are eligible to receive a premium tax credit, large employers (i.e., generally those with 50 or more full-time equivalent employees) in every state must comply with ACA coverage rules. Under the ACA, large employers must offer “adequate, affordable coverage” to their full-time employees, or face a penalty. However, that penalty is only assessed against a large employer if at least one of its employees receives a premium tax credit.
In order to ensure compliance with the ACA, employers should immediately verify the size of their workforce to determine if they meet the definition of a “large employer” under the ACA, and review the insurance coverage they offer employees to ensure it constitutes adequate and affordable minimum coverage under the law. Large employers also should be prepared for new IRS reporting requirements effective for calendar year 2015. A summary of these reporting requirements can be found at the IRS website.
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