The Affordable Care Act contains specific responsibilities for employers. The size and structure of your workforce — small, large, or part of a group — help determine what applies to you. Employers with 50 or more full-time equivalent employees will need to file an annual information return in early 2016 reporting whether and what health insurance they offered employees for calendar year 2015. In addition, they are subject to the Employer Shared Responsibility (ESR) provisions effective at the beginning of 2015.
An employer’s size for the year is determined by the number of its employees in its prior year. Generally, if your organization has 50 or more full-time or full-time equivalent employees on average during the prior year, you will be considered an Applicable Large Employer (ALE) for the current calendar year. For this purpose, a full-time employee is an individual employed on average at least 30 hours of service per week. Employers will use information about the number of employees they have and those employees’ hours of service during 2014 to determine if they are an ALE for 2015.
Under the ESR provisions, if an ALE does not offer minimum essential coverage that is affordable and provides minimum value to its full-time employees and their dependents, the employer may be subject to an ESR payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage through the Health Insurance Marketplace. However, ALEs that had fewer than 100 full-time or full-time equivalent employees in 2014 won’t have to make an ESR payment for 2015 if certain requirements are met.
Small employers (those that are not ALEs) are not subject to the ESR provisions. They are, however, subject to the information reporting requirements for providers of health insurance coverage if they sponsor a self-insured group health plan. Small employers that don’t provide medical coverage or do so only under an insured plan are not subject to any of these requirements.