Navigating ACA Compliance: Protecting Your Clients from Affordability Assessments

As we venture into 2024, the landscape of Affordable Care Act (ACA) compliance continues to evolve, and this week we want to draw focus on affordability criteria. For businesses classified as Applicable Large Employers (ALEs), meaning they have 50 or more full-time employees or equivalents, the affordability threshold remains a critical consideration. Currently set at 9.12%, this threshold dictates that the benefits offered to each employee should not require them to pay more than 9.12% of the lowest-cost plan available.

However, this seemingly straightforward guideline presents challenges for certain companies, especially those with blue-collar or lower-income employees. For such businesses, the affordability criteria may become a stumbling block, as they struggle to provide benefits within the specified percentage. The issue exacerbates when even the offered benefits become unaffordable for the employees themselves.

Enter the IRS and its enforcement mechanisms. The IRS is vigilant in ensuring compliance with ACA regulations, particularly through the issuance of penalty letters such as the dreaded 226J notices. These notices are triggered when employers fail to meet affordability standards, exposing them to potential penalties.

For employee benefit advisors, safeguarding clients against these affordability assessments becomes paramount. At Evolved Benefits, we recognize the urgency of this challenge and offer tailored strategies to protect our clients. With our expertise in minimum essential coverage plans and options meeting minimum value, we equip businesses with solutions to navigate the complexities of ACA compliance.

Looking ahead to 2024, the stakes are higher than ever. Penalties for non-compliance are set to increase, with each affected employee potentially costing businesses $4,460 in penalties under Penalty B, specifically concerning employees receiving premium tax credits.

The time to act is now. By partnering with Evolved Benefits, businesses can proactively address affordability concerns and mitigate the risk of IRS penalties. Our comprehensive approach ensures that even companies with budget constraints can meet their ACA obligations without compromising their bottom line.

Connect with us at Evolved Benefits to fortify your compliance strategy. Explore our website to discover the specialized services we offer, ensuring your organization is well-prepared and compliant in 2023 and 2024.

Feel free to reach out via email at [email protected], connect with us on LinkedIn, or give us a call at (888) 447-9994. Collaborate with Evolved Benefits to steer through the intricate maze of ACA compliance successfully.

Let's work together to ensure your organization not only meets regulatory standards but also proactively adapts to the changing landscape of employer mandate penalties.