Customer Care
866.570.5474
Find My Rep
Sales Directory
Send Us Your RFP
Contact Quoting
Running a compliant business ensures your clients are offering employees a minimum acceptable level of benefits. It’s critical your clients remain compliant at all times. This compliance ensures the safety and security of both their organization and its employees.
As a trusted strategic adviser, your clients look to you for more than just a benefits package. They need guidance on various areas related to their employee benefits and compliance, which are often confusing.
Amwins Connect and our preferred partners can help you provide the guidance and services your clients need to keep them compliant.
Affordable Care Act (ACA) rules, clarifications, and requirements continue to evolve and impact employers sponsoring health plans. Do a comprehensive analysis to understand the impact to their business and get a strategy that will help your client. Review our Compliance Guide with your client.
An Employer Payment Plan is an arrangement in which the employer either:
The exceptions to this rule include:
These types of plans do NOT satisfy market reforms and therefore do not comply with the ACA. The penalty for non-compliance is a $100 per day excise tax per applicable employee under the federal tax code. On an annual basis this could result in an excise tax of $36,500 per employee.
Insured group health plans may not discriminate in favor of highly compensated employees under the Internal Revenue Code Section 105(h). It’s important to note that the IRS (Notice 2011-1) announced that insured plans are not required to comply with the rules until further guidance is provided. It’s expected that once guidance is issued, its effective date will be delayed until plan years beginning a certain time after its issuance.
In California, per SB757, registered domestic partners of any gender and age must be offered the same coverage as spouses. This includes conditions for eligibility, plan offerings, and contribution structure.
An ALE is a company with 50 or more full-time employees. To be an ALE for a particular calendar year, an employer must have had an average of at least 50 full-time employees (including FTEs) during the preceding calendar year.
For example, an employer will use information about the size of its workforce during the 2021 calendar year to determine if it is an ALE for the 2022 calendar year.
Read more
For each month of the year you will need to know the number of full time employees (those working 30 or more hours per week) and the combined number of hours worked by all part-time employees. Use the LISI FTE Calculator to determine a company’s FTE average for the year.
Groups should not include the following members in the FTE count:
If an ALE is made up of multiple employers (called ALE members), the ALE members are aggregated, meaning considered together, in determining whether the group of employers is an ALE. While the ALE members are all counted towards determining ALE status, generally each individual company is responsible for its own employer shared responsibility payment.
Applicable Large Employers (ALEs) must offer coverage that meets both affordability and minimum value requirements, or potentially be subject to a fine.
Read more
This determines the highest percentage of household income an employee can be required to pay, for monthly premiums, in order for coverage to be deemed “affordable” under the Employer Shared Responsibility Provision.
Per the IRS: Because employers are not likely to know the household income of their employees, there are three safe harbors that an employer may use to determine affordability for purposes of the employer shared responsibility provisions. (These safe harbors do not affect whether an employee’s coverage is affordable for purposes of determining the employee’s eligibility for the premium tax credit.) In general, under these employer shared responsibility affordability safe harbors, employers are allowed to use Form W-2 wages, an employee’s rate of pay, or the federal poverty line, instead of household income in making the affordability determination.
For 2022 plan years, the affordability percentage is 9.61%.
For 2021 plan years, the affordability percentage is 9.83%.
An employer-sponsored plan is deemed to meet Minimum Value requirements if it covers at least 60% of the total allowed cost of benefits.
Quick Tip! You can determine whether a small group plan meets the Minimum Value requirement by looking at the Summary of Benefits and Coverage (SBC). The result is included toward the end of the SBC just before the coverage examples.
ALEs are required to offer minimum essential coverage that is affordable and provides minimum value to their full-time employees and their dependents. Employers who do not provide this coverage will potentially be required to pay a penalty to the IRS. This is sometimes referred to as “Pay or Play”.
The definition of “dependents”, for purposes of Employer Shared Responsibility, refers only to dependent children. Spouses are not included in the definition, and therefore an ALE is not required to offer coverage to spouses in order to be in compliance.
There are two circumstances under which and ALE could owe a penalty for non-compliance:
Employers who file 250 or more form W-2s, and who sponsor a group health plan, are required to report the cost of coverage provided to each employee on the W-2 form.
For employers not in compliance, general reporting penalty provisions for failure to file correct information returns and employee statements apply. The penalty could range from $50-$260 per return.
If your client is an ALE, use our 2021 ACA Tax Reporting Timeline to help your clients prepare for the year ahead.
The IRS provided the final 1095-C employer reporting forms and instructions. The 1095-C forms were modified slightly, primarily to facilitate reporting by employers who offered individual coverage HRAs (ICHRAs) in 2020.
The Form 1094-Cs are pretty much identical to last year.
Minor Changes to Form 1095-C
Filing Deadlines
Here are the critical filing deadlines for 2020 coverage:
ACA Requirement | Deadline |
---|---|
1095 Forms Delivered to Employees | January 31, 2021 (extended to March 2, 2021) |
Paper Filing with the IRS |
February 28, 2021 |
Electronic Filing with the IRS |
March 31, 2021 |
In addition, keep in mind that there are now a handful of states with individual mandates that may require reporting at the state level, and some have deadlines earlier than what is required for federal reporting.
All of these items and more are covered in our updated 1095-C & 1094-C Employer Reporting Guide.
The Internal Revenue Service has released 2021 annual inflation-adjusted limits for tax-favored employee benefits, including: Health Flexible Spending Arrangements (FSAs), Dependent Care Assistance Plans (DCAP) and Health Spending Accounts (HSA).
Most allowances are eligible for annual cost-of-living adjustments (COLA). The sole exception is the catch-up allowance for HSAs, which remains at $1,000 from year-to-year.
Cafeteria Plans
A Section 125 Cafeteria Plan begins with a basic Premium-Only Plan to pre-tax premiums and builds upon that with optional Flexible Spending Arrangements (Health, Limited, and Dependent Care FSAs) to cover out-of-pocket medical and dependent care expenses with pre-tax dollars and Health Savings Accounts (HSAs) that cover out-of-pocket medical costs plus build retirement savings with pre-tax salary deductions.
Amwins Connect has several partners offering administration services for pre-tax benefits. Contact your Sales team for more information.
Here are the 2021 inflation-adjusted benefit limits for Cafeteria Plans, with historical information for comparison:
Benefit |
2021 Limits |
2020 Limits |
Typically Updated |
Health Flexible Spending Accounts (Health FSAs) |
|||
Maximum Contributions |
|
||
Employee Salary Reduction Contributions |
$2,700 |
$2,750 |
October (Updated October 2020 for 2021) |
Employer Contributions |
Greater of:
|
Greater of:
|
|
Maximum Carryover |
$550 (For plan years beginning in 2020 carried over into 2021) |
$500 (For plan years beginning in 2019 carried over into 2020) |
Updated May 2020 |
Dependent Care Assistant Accounts (DCAPs) |
|||
Maximum Contributions |
|
||
Unless Married Filing Separately (e.g., Single or Married Filing Jointly) |
$5,000 |
$5,000 |
Set in Statute (Not indexed for Cost of Living Adjustments) |
Married Filing Separately |
$2,500 |
$2,500 |
|
Health Savings Accounts (HSAs) |
|||
Maximum Contributions |
|
||
Self-Only HDHP Coverage |
$3,600 |
$3,550 |
April/May |
Family HDHP Coverage |
$7,200 |
$7,100 |
|
Catch-Up Contribution (Individuals age 55 or older) |
$1,000 |
$1,000 |
|
Minimum Deductibles for Qualified High Deductible Health Plans (QHDHPs)* |
|
||
Self-Only QHDHP Coverage |
$1,400 |
$1,400 |
April/May |
Family QHDHP Coverage |
$2,800 |
$2,800 |
|
Out-Of-Pocket (OOP) Limits for QHDHPs |
|
||
Self-Only QHDHP Coverage |
$7,000 |
$6,900 |
April/May |
Family QHDHP Coverage |
$14,000 |
$13,800 |
|
Qualified Transportation Benefits |
|||
Monthly Limit Excludable from Income |
|
||
Parking |
$270 |
$270 |
October (Updated October 2020 for 2021) |
Transit Pass/Commuter Vehicle |
$270 |
$270 |
|
Qualified Small Employer Health Reimbursement Account (QSEHRA) Benefit Limits |
|||
Maximum Benefit |
|
||
Self-Only Coverage |
$5,300 |
$5,250 |
October (Updated October 2020 for 2021) |
Family Coverage |
$10,700 |
$10,600 |
|
Excepted Benefit Health Reimbursement Arrangement (EBHRA) |
|||
Maximum Benefit |
$1,800 |
$1,800 |
Updated October 2020 for 2021
|
Customer Care
866.570.5474
Find My Rep
Sales Directory
Send Us Your RFP
Contact Quoting