The provisions of the Affordable Care Act (ACA) known as the Employer Shared Responsibility Provisions, which are more commonly referred to as the “employer mandate,” require large employers who are covered by the ACA to pay an assessment under the Internal Revenue Code if they do not provide health coverage to their full-time employees that is compliant with certain standards.
The requirement that the coverage must be within the financial means of full-time employees is one of these conditions.
The phrase “affordability” refers to the proportion of total earnings required. The Internal Revenue Service (IRS) just lately made public an announcement regarding a sizeable reduction in the percentage for 2023.
The employer mandate is only applicable to businesses that employ at least 50 people on a full-time basis (or part-time employees, where a part-time employee counts as a fraction of a full-time employee based on hours worked).
If low-wage workers make up a large share of the workforce and covered firms are getting ready for yearly enrollment and choosing how much to charge employees for health coverage in 2023, then covered employers may desire to take the new affordability percentage into consideration.
Our colleagues in Employee Benefits and Executive Compensation, who often consult with clients about employee health benefit plans, have prepared a comprehensive Legal Alert that details this change and can be accessed here if you would want additional information on it.
The provisions of the Affordable Care Act (ACA) known as the Employer Shared Responsibility Provisions, which are more commonly referred to as the “employer mandate,” require large employers who are covered by the ACA to pay an assessment under the Internal Revenue Code if they do not provide health coverage to their full-time employees that is compliant with certain standards.
This assessment is due if the large employer does not provide health coverage to their full-time employees.
One of these factors is the requirement that the cost of the coverage must be affordable for employees working full-time.
The ratio of total earnings that must be contributed is what is meant when we talk about “affordability.” The Internal Revenue Service (IRS) has just made public a statement about a significant decrease in the percentage that would take effect in 2023.
Only companies that have at least 50 full-time employees are required to comply with the employer mandate (or part-time employees, where a part-time employee counts as a fraction of a full-time employee based on hours worked).
If a large proportion of workers earn low wages and covered businesses are preparing for annual enrollment and deciding how much to charge employees for health coverage in 2023, then covered employers may want to take into consideration the new affordability percentage. This is especially true if low-wage workers make up a large proportion of the workforce.
Read more:-
- Dark Matter Season 4 Release Date: Is the Series No Longer Airing?
- The Investigation Into the Election Results in Georgia Has Been Put on Hold
- An Online Job Listing for an IRS Special Agent Was False
Our colleagues in Employee Benefits and Executive Compensation, who frequently consult with clients regarding employee health benefit plans, have prepared a comprehensive Legal Alert that details this change.
If you would like additional information on it, you can access it here. If you have any questions regarding this change, please let us know.
