Trish Neely, CFCI
When it comes to the Affordable Care Act, size does matter; unfortunately for employers it’s not as simple as one size fits all. Depending upon the provision, you may be small if you have less than 200 employees, less than 100, less than 50, less than 49, less than 25, or less than 250. How does an employer keep it straight?
We have created a chart that includes eight provisions that have or will take effect and be applicable based on the size of an employer’s workforce (referred to in the regulations as group size). To use the chart, locate the provision in the left column, follow to the right to determine whether your group is small or large for that provision, then continue right to determine how or if the provision applies to you.
| Provision | Small | Large | Significance |
| Health Benefit Exchanges Effective 1/2014 | <100 employees in the preceding year. Each state may define a small group as 50 in the preceding year. |
>101 >51 | Small groups may access state exchanges in 2014;Large groups must wait until 2017. |
| Play or Pay Tax 2014 |
<49 employees on average in the preceding year; FTEs are included in the calculation. | >50 | Subject to the tax are large groups that don’t offer full-time EEs and dependents minimum essential coverage, or that offer the coverage but at unaffordable rate: i.e. it’s unaffordable if either the EE must pay 61% or more of premium or premium exceeds 9.5% of EE’s household income. |
| Medical Loss Ratio 2011 |
<100 employees A state has the option to define small as 50. |
>101 >51 |
Issuers are required to spend a percentage of premiums (80 or 85%) on “medical care” and rebate the “difference” back to participants. In the small group market the percentage is 80%; for large group it is 85%. States may impose higher standards. (Does not apply to self-funded plans.) |
| Small Biz Tax Credit 2010 |
<25 FTEs | >26 FTEs | Small groups may receive a credit for up to 35% of non- elective employer premium contributions (up to 25% for tax-exempt small employers). Average annual wagesmust be less than $50K. |
| Simple Café Plan 2011 |
<100 employees on average in the preceding 2 years, or for new employer, 100 expected in next plan year. | >101 | Simple Cafe plans avoid non-discrimination testing. Only small groups are eligible. |
| W-2 Reporting 2012 Tax Year | Filed fewer than 250 Forms W-2 for the preceding calendar year. | >250 | Aggregate cost of coverage reporting on each employee’s W-2 is only required for large employers. |
| Wellness Program Grants Date TBD | <100 | >100 | Grants available for small groups that implemented a new wellness program beginning in 2011. Awaiting guidance from HHS. |
| Automatic Enrollment Date TBD |
<200 | >200 | Large groups must enroll new full-time employees in one of the employer’s health benefit plans and continue the enrollment of current employees without requiring an affirmative election. Awaiting guidance from DOL. |
subject matter covered. It is distributed with the understanding that neither the authors nor FBMC are rendering legal, accounting, or other professional advice and assume no liability in connection with its use. No portion of this article may be reprinted or used without written permission from FBMC. Copyright 2012, FBMC.
