ACA Employer Mandate
What is the ACA employer mandate, and how can BambooHR help?
Purpose: To provide you with information that is useful about what the ACA employer mandate is, who it applies to, and how BambooHR can help.
What is the ACA employer mandate?
The goal of the ACA employer mandate is to encourage companies to provide employer-sponsored, affordable health coverage to their full-time employees. They encourage this by fining companies who choose not to comply.
To prove compliance with the mandate, certain-sized companies (also known as applicable large employers or ALEs) are required to submit ACA-specific forms (Forms 1094-C and 1095-C) to the IRS at the same time as their taxes. These forms give information to the IRS about the full-time status of a company's employees (based on the ACA definition of full-time) and the health coverage offered to those employees. Companies must also furnish an individual 1095-C form to each employee (think of it as a W-2 for benefits).
How do you know if you are considered an applicable large employer (ALE)? Well, it is based on the number of full-time employees (and full-time equivalents) you have had in the previous calendar year. If you have had 50 or more full-time employees in 2014, you are considered an ALE and must comply with the ACA employer mandate for 2015 (and so on for future years). However, there are some exceptions for 2015 (also known as transition relief) for companies with 50-99 employees.
The U.S. government has provided a Full-time Employee (FTE) Calculator to help you determine where your company falls on the spectrum based on your full-time or full-time equivalent employee count. You can also check out Section 54.4980H-2 of the IRS documentation for more help on calculating your full-time employee count.
While you are there, make sure to browse the official sites to get yourself more acquainted with the ACA employer mandate requirements. There are many rules, definitions, instructions, caveats, and exceptions in the mandate to take note of.
Here are some official resources for learning more about the ACA employer mandate:
Just as it "takes a village" to raise our little ones, preparing for ACA takes a village of experts who can provide each piece of data you need to create your complete picture of ACA compliance. Based on what we know about ACA, here are our suggestions:
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Determine employee status as full-time or full-time equivalents based on hours worked.
- Identification of Full-Time Employees
- Time tracking provider
- ACA Tracking in BambooHR helps you track the statuses you have determined in BambooHR.
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Determine if your health plans comply with ACA standards.
- Employer-Provided Health Coverage Informational Reporting Requirements: Questions and Answers
- Benefits broker or provider
- Benefits Tracking in BambooHR helps you keep track of your benefit plans and who is eligible and enrolled.
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Ensure Forms 1094-C and 1095-C are filled out correctly for your specific situation.
- Instructions for Forms 1094-C and 1095-C (2023)
- Affordable Care Act Information Returns (AIR)
- Talk to your accountant or legal/tax counsel
- In BambooHR, you can download an editable PDF version of the Form 1095-C with Part I autofilled with data from employee profiles and your account.
Getting started
To enable ACA tracking, navigate to Settings > Account > ACA Settings. On the ACA Settings page, click Enable ACA Tracking to begin the setup process that will take care of the initial transition of your account.
Enter company information
Information entered here will populate Part I of Form 1095-C when you download the form in BambooHR. You can edit this information in Settings > Account > Account Info, and if you do so, it will change what is populated on Form 1095-C.
If you use BambooHR® Payroll, you will not enter company information here. Instead, we will use the company information you have set up in Settings > Payroll to populate the employer section of each employee's Form 1095-C.
Choose an ACA status for each employment status
The IRS has specific designations for employment statuses. In Step 3, you will need to assign an ACA status to each employment status. The standard options created by the IRS include the following:
- Full-Time
- Part-Time/Variable Hour (eligible for benefits)
- Part-Time/Variable Hour (ineligible for benefits)
- Intern (eligible for benefits)
- Intern (ineligible for benefits)
- Contractor (1099)
- Seasonal
When you select one of the options for an employment status, you will be able to view the official IRS definition of that option with a link to learn more about it on the IRS website.
After you have assigned an ACA status to all employment statuses, click Next.
Verify your employees' employment status
Before completing the process, you will need to review a list of all employees with an employment status and a corresponding ACA status. If you assigned an incorrect ACA status to an employee, you can click Go Back to change the status or navigate to the employee profile to update their employment status.
Click Save and Finish to complete the setup.
ACA Settings
On the ACA Settings page, you can find the following information:
- Company Information: This is the information you have added during the setup. This information will populate the employer section of your 1095-C file exports. You can click Change Company Info if you need to update your company information. If you use Payroll, you will see a note letting you know you can find this information in Settings > Payroll.
- Disable ACA Tracking: Click on this button if you need to disable ACA tracking in your account.
After enabling ACA tracking in your account, the ball is in your court to maintain accurate information based on your chosen ACA strategy. Your job is to do the following:
- Make sure the setup of company benefits is correct.
- Assign each employee to their correct employment status, including a corresponding ACA status.
- Make sure you measure hourly employees to determine if they qualify for the ACA Full-Time status.
You will also see a new column named "ACA Status" in Settings > Employee Fields > Employment Status. This column lists the ACA status you have assigned to each employment status field. When adding a new employment status field, you will need to select a corresponding ACA status.
ACA status information will not show up in the Employment Status table on the employee profile. Instead, you can find the information in the ACA reports in BambooHR: ACA Benefit History and ACA Monthly Totals.
Even though we are not ACA consultants, we are employee data experts, so we like to help where we can. We offer some existing features and reporting that will help make your life easier when preparing your ACA forms in January. Also, we have added some effective tools that save you time as you enter the world of ACA compliance.
Our benefits tracking feature provides you with more robust cost tracking, which is a central part of determining plan affordability and a deeper level of plan information, including ACA-related questions for health plans. Click here to learn more about Benefits Tracking in BambooHR.
This report provides visibility into an employee’s benefit eligibility and enrollment history, coupled with changes in their ACA employment status—both impact how you fill out Part II of Form 1095-C. This report is only viewable if you have enabled ACA Tracking.
The ACA Monthly Totals report assists you in filling out Part III of Form 1094-C. It is important to keep in mind that this report will pull historical data based on the data stored in BambooHR, starting in 2015. Click here to view more information about this report.
The IRS claims that one 1095-C form will take 12 minutes to complete. We are shaving off at least a few of those minutes by providing you with a way to download a 1095-C for each employee and filling out Part I for you.