Why ACA filing services are important for your employees

September 15, 2021 at 7:00 AM
Why ACA filing services are important for your employees

When the Affordable Care Act was put into effect, everything changed in regards to employers providing health insurance for employees. With ACA filing services from Ashton Benefits, you can make sure that your team has the necessary documentation it needs to prepare for tax season. If you’re not sure why you need these services for your employees, we have some reasons that can help.

What is the ACA?

The goal of the ACA is to make health insurance more affordable and available to more people. To do this, there are federal tax credits and subsidies that have been put in place for households with an income between 100% and 400% of the federal poverty level. Another result is the expansion of the Medicaid program as adults who make an income less than 128% of the federal poverty line are eligible for coverage. Although, not all states have expanded their Medicaid programs. Finally, the ACA is designed to support the innovative delivery of medical care that can be performed at lower costs. All this is done to ensure that medical care is more readily available for all US citizens.

What forms are required?

When filing taxes each year, everyone is required to provide proof of eligible insurance coverage with a Form 1095-B. This shows the IRS that each member of a household is covered by an insurance plan that meets the requirements that have been established by the ACA.

How can you avoid penalties?

While employees are no longer mandated to have health insurance coverage to avoid a financial penalty, employees are still required to offer it. The three specific requirements include:

  • Minimum essential coverage
  • Minimum value
  • Affordability

Let’s look at each of these individually to understand what each means for you as an employer.

Minimum essential coverage

The coverage referenced in this aspect of the ACA refers to the classification and quantity of employees who are eligible for health coverage. Employees who are considered full-time and work an average of at least 30 hours each must be offered coverage for themselves and their household, which includes dependents up to age 26.

Large employers that fail to offer coverage will be subject to a penalty of $2,000 times the number of full-time employees you have. Despite offering coverage, you could still be required to pay the penalty if one of your employees elects to buy coverage from the Health Insurance Marketplace. There is no requirement for part-time employees.

Minimum value

An eligible health insurance plan is required to provide a minimum value of at least 60% of healthcare costs, which means employees must pay the remaining 40%. Large employers must verify that the plan’s coverage meets this threshold with a Form 1095-C. We can help to verify this eligibility.


With the ACA, health insurance policies must not cost more than 9.83% of an employee’s total income or the federal poverty level. This number was increased from 9.5% in 2021 due to inflation. Should an employer fail to meet the affordability requirement, they’re subject to a $3,000 penalty for each employee who is eligible for tax credits in the Health Insurance Marketplace.

Get in touch for filing services

If you’d like help to make sure that you’re compliant with the ACA, ask about our ACA filing services. Our team at Ashton Benefits will walk you through the process to ensure that you’re offering appropriate healthcare benefits and providing employees with the necessary documentation. Give us a call at 877-640-2813 or send a message via our contact form.

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