Large companies subject to the ACA requirements have been working on compliance with the Act since its passage and seeking to improve their employee offerings. Companies with fifty or more full-time employees or full-time equivalents must meet the standards for coverage and affordability. In addition, ALEs (applicable large employers) must offer compliant coverage to at least 95 percent of their workers, plus employees’ children who are not yet 26 years old.
Coverage meets the affordability requirement for 2023 if the employee contribution for individual coverage costs less than 9.12 percent of their household income. The employer does not have to meet the affordability standard for dependents. Still, new legislation allows dependents to obtain coverage through a marketplace plan using premium tax credits if they can’t get affordable policies through the employer.
Depending on your business’s size and financial structure, you may want to consider these strategies to reduce the financial strain of providing benefits under the Affordable Care Act.
Companies like self-funding because it offers an opportunity to save money and improve cash flow. The company pays directly for the medical claims that workers submit, usually through a third-party administrator.
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