TBA Law Blog

Posted by: Christy Gibson on Feb 14, 2014

Employer Obligations Under the ACA

By Norma Shirk


Corporate Compliance Risk Advisor, LLC


The Affordable Care Act (ACA, a/k/a Obamacare) places a number of obligations on employers. The obligations vary depending on the number of employees. Here’s a quick review of some of the employer obligations.

Counting employees. There are two reasons to count employees. The first reason is to determine whether an employer is small (under 50 employees) or large (more than 50 employees).  When doing this head count, the difficulty arises in counting the “full-time equivalents”.

The second reason to count employees is to determine who is eligible to enroll in the group health plan.  When counting for this purpose, the difficulty is counting the hours worked by variable hour or seasonal employees.  If your company has employees who work flexible schedules, as happens for many retailers, then the Look Back Measurement Method will be important.

Notifying employees about the Exchange.  Employers are required to notify their employees about the healthcare Exchange (also called a Marketplace), which gives employees another coverage option if they decide not to enroll in their employer’s group health plan. Employers may use the model form created by the U.S. Department of Labor (DOL).  Employers were required to initially distribute the notice by October 1, 2013, but will also need to distribute the notice to new hires.

IRS reporting. Employers with more than 250 employees are required to report premium costs in box 12 of the W-2.  Eventually employers with fewer than 250 employees can expect to face this requirement.  In addition, large employers will be required to report more details about their group health plans to the IRS under §6056, including how many employees are covered under the plan. The §6056 reports will begin with the 2015 calendar year.

To learn more about these employer obligations and other aspects of the ACA that affect employers, please join us for the Corporate Counsel section’s CLE program on March 3, 2014.