The Top 5 Compliance Tips For 2016

Tags: ACA, compliance

1. California Small Group Market in 2016: 2-100 full-time (FT) + full-time equivalent (FTE) employees
2. California Large Group Market in 2016: 101+ full-time (FT) + full-time equivalent (FTE) employees
3. Reminder: Effective with the first plan year that begins on or after 1/1/2016, the full-time equivalent (FTE) formula used to calculate employer size to determine whether or not the employer is subject to the Affordable Care Act (ACA) employer mandate will be used to determine eligibility for either the small group or large group market. (Prior to this change, eligibility was based solely on the number of full-time (FT) employees.)
4. The new 2016 California small group or large group market eligibility calculation is: Number of FT employees + number of FTE* employees = employer size*Total hours of service for all part-time (PT) employees during month (with no more than 120 hours per PT employee) divided by 120 = FTE.
5. In December 2015, the IRS announced that employers do not have to use only 9.5% for their Affordability Safe Harbor calculation. Employers may elect to use the same affordability percentage used by the Covered California Exchange to determine eligibility for a Premium Tax Credit (PTC). That affordability percentage increases each year as follows:
   2014: 9.5%
   2015: 9.56%
   2016: 9.66%This change will be welcome news to many 50+ FT and FTE employers because it will be easier for them to meet this standard each year. Why not be the first to share this good news with your current and prospective small group clients with enough part-time employees to bring them over the 50 or more FT + FTE threshold? This news just might be a great door opener for you!