Name: ACA Compliance 101: Getting Your Filing Right
Uploaded: 2026-09-01T18:30:07.702Z
Duration: 1 h 4 min 20 s
Description: ACA Compliance 101: Getting Your Filing Right

Transcript for "ACA Compliance 101: Getting Your Filing Right": Welcome, everyone, and thank you for joining us. This is ACA compliance one zero one, getting your filing right. The first session in our new HR and compliance one zero one webinar series. Filing season is coming, and the goal of this hour is simple. By the time we are done, you should know exactly where your organization stands on the requirements that trip up most employers and what to do about the ones you're not sure about. So with that said, let's get started. While most organization file ACA reports, fewer have the working knowledge that keep those filings out of trouble. How ALE status is determined, whether to file ten ninety five b or ten ninety five c, which states require reporting beyond the federal baseline, and the pitfalls that turn small mistakes into filing problems. That gap is where penalties live, unfortunately, and it is where we are going to focus on today. So a quick word on what to expect. This is a practical session on ACA reporting fundamentals. It is built for HR professionals, benefits administrators, and finance teams, the people who actually own the filing when the deadline hits. We are focused on getting three things right, your ALE status, your form selection, and your reporting deadlines. What this session is not, it is not legal advice. If you have a specific situation, bring it to your benefits counsel or tax adviser. It is also not a theoretical overview. We're focused on what is happening right now and, of course, what to do about it. So briefly, for those who are new to us, Mitratech serves more than 28,000 organizations across legal, GRC, and HR solutions. Our HR solutions business helps employers manage the full employment life cycle, HR compliance and guidance, employment eligibility and I nine, background screening, perform performance and talent management, and newly leave management. So if you have any questions about that, feel free to put that in the chat as a new solution that we are bringing to market. What we do, how you can work with us, you can do that in two ways, directly with expert tools and guidance for employers navigating the compliance demands of hiring, managing, and retaining people, and, of course, through partners, working with leading, partners like health insurance carriers, HCM platforms, benefits brokers, and tech companies to bring our solutions to their clients. Some of you are are here through one of those partners. We welcome you, and this session was built with you in mind. And a couple quick housekeeping items before we get started. The recording and slides will be sent out after the event, so you do not need to screenshot anything, take any notes. You will have the recording and the slide presentation. Please drop your questions in the q and a panel. You will find it if you orient yourself to the screen. You will find it on the right hand side of the screen. It's next to the chat button. We ask you to put your questions in the q and a, and, we will address those questions at the end of the session. And Angela, our presenter, might even answer a couple during the session. We have four poll questions throughout the session. And you when I launch the poll, it will appear between the chat and the q and a tabs. So please, we, we encourage you to participate, and the responses that you generate help tailor tailor what we spend our time on today. And we will be sharing registration links for upcoming webinars in the chat, keeping you up to date with the latest and greatest webinars that we're bringing you from Mitratech. And without further ado, let's introduce our presenter. Today, our presenter is Angela Surra, principal benefits expert at MetroCheck, and she has come on stage. Angela has spent nearly thirty years in the insurance industry, and what she does best is exactly what this session needs, turning ACA rules and into guidance that you can actually use. And with that, Angela, the floor is yours. Please take it over. Awesome. Thank you so much. And y'all are already engaged. I love that. So continue to use the reactions as Brian mentioned. Also feel free if you have questions throughout, go ahead and drop those in the Q and A box. I will, possibly answer some during, but for sure I'm going to try to do my very best to save some time at the end, to dig into some of those questions. Our agenda, as Brian mentioned, I'm not going to spend any time on this, this is all about ACA, giving you kind of the backstory and really help prepare you for, this year's ACA season, which I cannot believe we are at September 1 already. So let's go ahead and dive in, and we're gonna start with the basics. So the Affordable Care Act became law all the way back in 2010, and it created what's often called the employer mandate. It's referred to as health care reform. You'll also hear it called play or pay. Here's really the core on this. Once an employer averages 50 or more full time and full time equivalent employees, they're what's called an applicable large employer or ALE. As an ALE, the law is encouraging you to offer ACA compliant coverage. That coverage needs to be offered within ninety days or less. That's what we refer to as typically a waiting period. You can't make someone wait any longer than that. The coverage offered, I mentioned ACA compliance, so it needs to include minimum essential coverage. That's simply what is referred to as what coverage qualifies under the law. It also has to provide minimum value, which means basically the plan is designed to pay at least 60% of the total cost of covered services. Now keep in mind, the law doesn't legally force an ALE to get a group health plan and offer it. It works on that play or pay premise, meaning play by the rules or potentially pay penalties. Now some ALEs will go through an exercise to weigh the cost differences between penalties for not offering coverage versus the cost to offer a benefit plan. And and honestly, that's a strategy. Absolutely. To prove compliance, there are reporting requirements. If you want to dig in, any deeper to any of this, although we're going to cover quite a bit of it today, for those of you that do have a subscription with Mineral, you can check out our Affordable Care Act toolkit and you'll notice, there'll be a little bell icon and a link, there, a hyperlinked resource there. So let's talk about affordability. Affordability is a compliance obligation for applicable large employers. This is different than the employer contribution and, excuse me, employee participation requirements that a carrier may have. So here's basically the definition. Coverage is affordable when a full time employee's contribution toward the employer's lowest cost ACA compliant plan for a cell phone or single coverage doesn't exceed a certain percentage of their income. Notice I said single or employee only coverage. This means an employer has no obligation to pay anything toward coverage for kids or spouses. So, although ACA requires an employer to allow an employee to enroll children, it doesn't say anyone other than the employee has to pay for it. Now, employers generally don't know an employee's actual household income, right? So the IRS gives you three, safe harbors to use to ensure that you are, compliant with ACA affordability, and I'm gonna walk through those next. The affordability percentage does change each year, and the new percentage applies when your plan year begins in that year. So, for example, for plan years that begin in 2027, the affordability percentage is 10.22. Remember, I mentioned an ALE may go through the exercise of comparing the cost of having a plan versus potential IRS penalties. Well, if a plan is affordable based on maximum employee contribution that is not greater than 10.22% of that employee's wages for self only coverage, then who pays for the other 89.78% of the premium? You guessed it, that would be the, employer. So you see how that can be a strategy to do that kind of comparison. So how do you actually test affordability? Well, if you don't know someone's household income, obviously, employers have those three optional safe harbors that they can use. First is the federal federal poverty guideline for a, household of one, and household of one, and this is this value is published each year by Health and Human Services. This is not the employee's actual wage for the FPL safe harbor. It's that same flat number for every employee, which is exactly why, it's honestly the simplest of the three. It's also going to be the lowest contribution amount, typically, that you can ask an employee to contribute. The second is w two wages. This uses the employee's box, w two box one wages for the year, but here's the catch. You're estimating this in advance for, you know, pricing purposes. And box one, you have to keep in mind, doesn't include pretax deductions, things like four zero one ks contributions or pretax, premiums. So the number is often going to be lower than gross pay. Another key thing you with using the w two wages, you can't change contributions midyear under the safe harbor. So it's not really a great fit for anyone with variable hours or variable pay. And then the third option is rate of pay. This uses the employee's hourly rate or monthly salary, if they're a salaried employee, multiplied by one hundred and thirty hours for hourly employees. It's really the most precise reflection of actual, wages, but you shouldn't use it for tipped or commissioned employees since their pay structure doesn't really, you know, fit the formula. Of note for this particular method, you can't change an employee's single coverage contribution mid plan year if they happen to get a raise. You can, however, adjust it if they, happen to have a pay decrease. And I love that you all are already putting questions in the Q and A box. Please keep it going. So let's run some actual numbers here. So for our example, the plan year begins on January 1 of, let's say 2026. I used some 2026 numbers here. So, we're going to use that 9.96 affordability percentage from '26. So, starting with the Federal Poverty Level, we would take the 2025 Health and Human Services federal poverty level for a household of one, which is 15,650. We're going to divide that by 12 to get a monthly figure. We use monthly in in these examples because ACA reporting uses a monthly value. Obviously, you would do the calculations differently for your own payroll, frequency. So we take that monthly figure, multiply it by 9.96, gives you a value. When we look at w two wages, again, we need to estimate what the w two box one wage for 2026, what we estimate that to be. We're gonna multiply that by our 9.96% and then divide by 12. Rate of pay, we need to look at for hourly employees, what's their hourly rate of pay? We're going to multiply that by a 130. Why are we using a 130? Well, that that amount is essentially the minimum required hours to be considered an ACA full time employee. So regardless of how you categorize an employee in your own systems, keep in mind that the law requires, that you treat someone as full time if they meet the minimum hours requirement. Now when you're do using rate of pay but you have a salaried employee, you don't have to back into what an hourly rate would look like. You can simply use a monthly calculation. And again, we use monthly because that is what is going to be reported on form ten ninety five. So if I think about, well, which you know, how would I categorize these three? FPL is definitely the easiest. You don't have to worry about what an employee what you're paying your employee. It's based on the health and human services, FPL guidelines. The most accurate is usually gonna be the rate of pay. And then, of course, the, hardest to use is the w two wages. Again, because you have to kind of predict or estimate what a w two box one is gonna look like when the year is finished, when we're at the beginning of a year. So using a safe harbor method is optional. It's not required that you do that. But one more thing about safe harbors, you're not necessarily locked in to using just one across your entire population. You can apply different safe harbors to different employee groups, but the key is if you're making up classes or groups of employees to use different safe harbors, you want to make sure that those groups are based on reasonable categories, you know, kind of defensible lines like job category, type of compensation, hourly versus salary versus commission, or maybe it's based on geographic location. But they've got to be based on, you know, bona fide business classifications. Anytime there's a law with obligations and mandates, there are usually dollar penalties attached if an employer gets it wrong. And there are two distinct penalties under section forty nine eighty h, and mixing them up is one of those, kind of common misunderstandings that I see. So I want to talk through this a little bit. The trigger for penalty A or B is generally triggered by an employee going out into the individual marketplace and receiving a premium tax credit. Penalty A, which is forty nine eighty H A, applies when the applicable large employer fails to offer minimum essential coverage to at least 95% of its full time employees. There are two what I like to call kind of graces here. First is that 95%, and I believe it's 95% because it allow it allows for a margin of error. And the penalty calculation for this one begins, adding up with the thirty first employee. Here's the kicker, the potential penalty for this is gonna be multiplied by the number of full time employees. Remember I talked about that strategy of comparing the cost of offering coverage versus just hedging your bets and paying the penalty? That's kind of another set of numbers to include in your equation. There's another part of the equation, which is penalty b, under forty nine eighty h b. And this applies when you did offer full coverage, but it wasn't affordable or the plan that you offered didn't provide minimum value. And this one, only applies for each employee who actually received a premium tax credit on the marketplace. So it's narrower in scope, but it can still add up. So keep in mind, an employee who receives a qualifying offer coverage that is affordable is not eligible for a premium tax credit on the individual marketplace. However, they could answer something incorrectly in a marketplace application and appear to be eligible. What happens in this situation? The employer will likely get a notice from their state exchange or if your state is in the federal, marketplace, they'll get a letter notifying you which employee, received a premium tax credit. But then this will typically get translated into they're gonna the marketplace is gonna send that information to the IRS, who will then issue you a potential penalty letter. It's an audit letter. This, is audit letter 226J, and even though perhaps the offer was made, it was a qualifying offer, everything lines up, it's the employer's burden of proof to respond to that audit letter and say, Hey, this employee was eligible. We offered coverage, this was the coverage, you know, proof that all the things, and they chose to waive, here's a copy of their waiver. Or maybe it's a situation where, you know, that employee was not benefit eligible. They were part time. There was no offer, you know, and you can prove that they they were not ACA full time. So that gives you a bit of a of an overview about penalties, but beyond the employer mandate for ALEs, there are separate penalties just for getting the reporting itself wrong or failing to do the reporting. There are two categories here. It's kind of a double edged sword of penalties. Failure to file means you didn't submit the required forms to the IRS. Maybe you filed incorrect information or you filed late. And then failure to furnish means you didn't get copies of the forms to employees in a compliant manner, or maybe you've got them there late. These penalties, are usually, cropping up when the IRS sends a letter numbered 5600 '99. And what it's going to do is it's going to estimate the penalty times the number of W2s. It's then up to the employer to come back and say, okay, well, I have a population of part time employees who were never eligible, so, you know, here's all the documentation. We need to reduce that penalty. And as we get into a little more minutia, especially digging into the definition of applicable large employer, which is really the cornerstone of comply you know, figure that out as the cornerstone to complying, You know, we'll we'll talk a little bit more, in detail about how these can that can kind of play out. It's interesting that where I see problems cropping up is when an employer, isn't confident or understanding how to calculate their ALE status and ends up filing the wrong form series. So filing a wrong form series is like not filing at all. So hopefully, all that we're gonna cover today is gonna really help you gain a greater understanding. And I I I want to kind of drive this home by a real life example before we get into defining ALEs is, I've I've worked with a home health care business, several years ago. This business didn't offer health insurance to their employees at all. They classified about 90% of their employees as part time. If anyone knows anything about a home health care business, you probably understand, why. But they classified the workforce as part time without actually looking at the employees' hours or determining their true ALE status. So they had employees who obtained premium tax credits on the marketplace. They filed about 245 w twos. They received that IRS letter five six nine nine that I mentioned, and that is really just that initial inquiry letter where the IRS is basically saying, hey, you look like an applicable large employer based on the number of w two's you filed, but we don't see where you completed ACA reporting and and things like that. So, the root cause of this penalty, which is pretty substantial that I have included here in the slide, was that the employer didn't realize they were an applicable large employer. They were under the misconception that they only needed to count their full time employees, meaning the employees they, as the business, classified as full time. They didn't look at the hours of service for all of their employees that they classified as part time to see if any of those employees actually met the minimum requirement to be considered full time. So long story short, they had to, really dig in to the hours for each of those employees, and they had to look every single month of that tax year that they were getting the penalty on and then come back with this documentation: Okay, IRS, out of the two forty five W-2s that we file, only X number of those were truly full time by month, each single individual month of that year. It was a very monotonous, task. You know, we went through the exercise together of determining ALE status. It was quite the ordeal that did end up with a pretty substantial, penalty amount and that doesn't even get in and that's just for, you know, failure to file and failure to furnish. I didn't get into it on this slide, what the cost was for not offering coverage. That would be your employee mandate or employer mandate penalty. So it was a little bit crazy. And, you know, everything that we've we've talked about so far applies if you are an applicable large employer, except for the failure to file and the failure to furnish, which we'll talk about here in a little bit. So what I want to do is really hone in on applicable large employer status because I want everybody in the room with me today to go away from this webinar confident that they know how to calculate their applicable large employer status. And before we do that, Brian, do you want to take away this poll? I do. I do. Thank you, Angela. So I've launched a poll. You'll see it between the chat and q and a tabs. So do you know your organization's applicable large employer, ALE, status with confidence? Yes. The first answer, a, yes. We've calculated it and confirmed it. Awesome. B, we think we know, but haven't run the FTE calculation recently. C, no. We're not sure, and this webinar is really for you. And d, not applicable. We're clearly under the 50 FTEs, and we hope that's true. Alright. So we're just gonna give it a few more seconds, for everyone to fill it in. Wow. People are really getting after it. That's awesome. So it. let me close it out in three, two, one, and let me share the results. And so we, yes. We've calculated and confirmed it, 38.96, so 39%. We think we know but haven't run the FTE calculation recently, almost 20%. No. We're not sure. 9%. And not applicable. We're clearly under 50 FTEs. 32%. So what do you think about those numbers, Angela? You know, I'm I'm super excited that 38.96 percent have calculated and confirmed it, so, applause to you all. Keep in mind, this is something you want to review every single year. So thanks for surprising me today. Let's see if what we continue to talk about would maybe change your answer. So, Brian, can you close that? I'm working on it. I am sharing. out the. Thanks. it's not coming off the screen, so hold on. Let me try to share another slide. Sorry. I'll raising a new platform, it's it's very high-tech. So high-tech. So high-tech, we're struggling. No worries. No worries. Let me try to share. Let's see if that works. Nope. Oh, my bad. I need to stop sharing. Apologies, Oh, everyone. cool. It was, Cool. it was human error, so. Oh, there you go. awesome. My. apologies. Thank you. Okay. So, what makes an applicable large employer? So, an ALE is one that averaged 50 or more full time and full time equivalent employees during the preceding calendar year. I want you to notice the word preceding. That can trip people up. So, for example, if I need to determine my ALE status for calendar year 2027, then I'm going to account employees in 2026. If I average 50 or more full time and full time equivalents in '26, then I am an ALE for '27. Even if you go below 50 during '27, your ALE status remains for the entire year. So who counts towards that 50? So, common law employees, in plain terms, anyone the business directs and controls the way an employer directs an employee. That includes full time, part time, seasonal, and temporary workers. Now we're not reporting on all of those folks, but we need to count all of these folks to determine our ALE status. Who doesn't count? Sole proprietors, partners in an LLP, members of an LLC, anyone who owns 2% or more of an S corp, so on and so forth. I want to put a little bit of extra weight on that last one. Correctly classified independent contractors. Misclassifying employees as contractors to stay under 50 is exactly the kind of gap that can draw some IRS scrutiny. Remember that home health care example from a few minutes ago? So let's define two terms you'll hear a lot during the rest of our session. So a full time employee is someone who averages at least thirty hours of service per week or a hundred and thirty hours per month. Those two thresholds are interchangeable depending on, which measurement method you're using. A full time equivalent or FTE, works a little bit differently. It's a combination of part time employees whose hours add up to the equivalent of one full timer, not a single employee. This matters purely for determining ALE headcount. We'll go a bit deeper coming up when an employee classifies part time, it may actually be deemed full time based on their hours of service. So let's do kind of a really simple rudimentary example here. ABC Biz has 40 employees that they hired to work, on average, thirty six hours per week. Those are already full time on your own based on the hours, so we can count that as one each. So 40. We're already at 40. Okay? Now they also have 10 employees working fifteen hours per week. Remember, the minimum is 30 per week. So each of those is one half of a whole or one half of a full timer. Right? So when we add that together so let's see. 10 full time okay. 10 part time. So that's five. Right? So that puts us at 45. Right? So if I'm at 40 plus five, 45, I'm under 50, I'm not an ALE. So hopefully that, even though very kind of basic rudimentary calculation, and not everybody's part timers' hours are going to be that cut and dry, but that hopefully gives you a bit of an indication of where we're going there. Now we're still trying to figure out ALE status. Right? So we've we've we've covered the baseline, we've set the groundwork, but now here's where things can get a little more interesting and where I see employers, kind of miss the mark. Your headcount doesn't stop at one legal entity. If your business is affiliated with other businesses through common ownership or part of what the IRS calls a controlled group, you have to combine all of those related entities' employees together to count to determine ALE status for the whole group. In other words, you can't just keep each of your separate businesses under 50 and assume none of them are ALEs. So let me show you a little bit about what I mean. Another kind of basic example. Okay? So in our example, we have Jane's Bakery. Or we have Jane. I'm sorry. Jane owns three businesses: Jane's Bakery, Jane's Pizza, and Jane's Subs. So Jane's Bakery has 10 FTEs, so that shortening that, meaning the total between full time and full time equivalent is 10. The pizza shop has 20. And then finally, the sub shop has 25. Now, if you look at these individually, clearly we are below the 50 mark for each, right? But IRS section four fourteen comes into play and says, because Jane owns all of these businesses, and even though each of these businesses has their own, federal employer identification number, it's Jane's ownership that causes us to have to count all of these together. And what happens is when I add all three businesses' employees together, I'm at 55 FTEs, and that's over the threshold. So what happens now is each of those businesses is considered an ALE. That means they've got to make sure they're in compliance with all of the things that encompass the Affordable Care Act. I hope that helps kind of pull that together, again, because this is one of those areas that I see employers struggle with, or they don't even realize that this is, you know, a section of the code that plays into ACA. Critical when you're counting your, employees for ALE status that you pay attention to any of the businesses that are commonly owned. Now let's go back. We talked about when you're counting in the preceding, calendar year. So again, if I am trying to determine whether I'm an ALE for calendar year 2027, I need to look at my average head count from calendar year 2026. Okay? Now here's a here's kind of another little bit of a curveball to throw into the mix and where it can get a little bit more complicated. So we need to consider when could I possibly become an ALE if there's a merger or an acquisition that has happened in a calendar year. So I put together kind of three scenarios that are kind of common. When a non ALE, so let's say one small business acquires another small business. They may become an ALE on the date of that acquisition. What about when a non ALE acquires an ALE? Well, then they become an ALE on the date of acquisition. Or an ALE acquires a non ALE. Well, the non ALE likely becomes an ALE on the date of acquisition. So, as with any law, there is a ton of nuance and I just want to bring these to your attention. Not that I expect you to figure all of this out all on your own, but it's something to keep in mind when you're thinking about, who do I need to work with? Who do I need to talk to to ensure I'm doing my ALE calculation properly? And here's why all of this matters and why I said earlier ALE status is the cornerstone that you've got to get right to know how and in what fashion you need to comply with ACA. And you want to know this before the year ends because if you're a non ALE now, but you're trying to determine, am I going to be an ALE for '27 based on my average in 2026, you want to do that now, or at least early in q four. Because if you do need to come into compliance, you have some time to get that accomplished, especially if you're not offering a benefit plan, you know, things like that. So, it's worth confirming, in Q4 so you know where you need to go, at the beginning of the year. Another reason why ALE status matters is because it's what's going to determine what form series applies to you. Now, a lot of what we talked about has to do with ALEs, right? But ACA reporting takes us on a little bit of a different journey. So ACA reporting has been a requirement since the twenty twenty fifteen or the 2015 tax year. ALEs, yes, they absolutely have to do ACA reporting. So do insurers or insurance carriers based on their fully insured book, but also small non ALEs who sponsor a self insured that includes a level funded health plan also have reporting requirements. The difference is what is being reported on and which form series to use. I've got a fun kind of little, I don't know what you call this, chart. You know, answer yes, go this way, answer no, go that way. I'm not going to dig into this in too much detail. It will be available to you when we share the slide deck out. Really the premise here is it's critical that you know which form series you need to use. And, you know, I've run into situations many times over the years that a, you know, small employer level funded, assumes they're gonna just use B series like they always have, but when we dig into, well, do you own any other businesses? That's where things get tricky and they may realize, oh, gosh, I have been using B forms, but technically I am an ALE because I I own all these other businesses. So just be mindful, of that. Let's dig into the two different form series that apply to employers. So first would be what I like to call C series. This would be forms ten ninety four and ten ninety five C. All applicable large employers, regardless of whether you sponsor a fully insured plan, a self insured or level funded plan, or you sponsor no plan at all. If you are an ALE, you must use C series forms. And because we are talking about ALEs for a minute, we're talking about C series forms, I want to back up by bringing forth a little bit about how do I know if any of the employees I've classified as part time are actually considered ACA full time. Remember we talked about that real life example I had with that home health care agency. What we ended up having to do with that agency is take a look at, and this was prior to my mineral days we have to take a look at each month of the year for each employee and calculate their hours of service. Another option, if you plan in advance, is a look back measurement method. And we're going to break down those two exclusive options that the IRS gives you. But before we dig into that, let's just define an hour of service. So an hour of service, as defined by the IRS, is each hour for which an employee is paid or entitled to payment for the performance of duties for the employer, and each hour for which they are paid or entitled to payment for a period of time during which no duties are performed. So let's think about, yes, they're actively at work, they're working, those are hours of service. But if they're on paid time off, those are hours of service. There are other hours that we need to be mindful of, such as, when they're, you know, on a protected leave of absence, things like that. We have an entire chart in our Affordable Care Act toolkit that breaks down hours of service. So now that we know we've got to count all of these hours for these folks to determine whether or not they are full time, because if they're full time, they get a ten ninety five c form. We have those two exclusive options. And when I talked about that home health care agency I talked about, we had to use the monthly measurement method. Monthly measurement is the default method, meaning if you have not adopted the look back measurement method, and adopted means you have that written in your ERISA plan documents if you're an ERISA covered employer, then monthly is all you get to work with, which is what that home health care agency had to deal with. So if we look at our example, Orey was hired to work fewer than thirty hours per week. We just kind of break through, okay. So if I worked one hundred and eighteen or if we worked one hundred and eighteen hours in January, they're considered not full time, so they would not be benefits eligible for the following month. February, one hundred and thirty one hours. They were full time, so they would become benefits eligible, for March 1, so on and so forth. This can get very monotonous. And if I asked for a, emoji, who loves to do open enrollment and who would love to do it multiple times a year, I'm going to get a lot of thumbs down, right, because nobody wants to do that. It's very administratively burdensome. But the look back measurement method, this is one that you can extend out the period of time longer than a month. You can, establish a look back period between three to twelve months. This is a little bit, it can seem a little bit more challenging at first, but it's actually once you get it set up, it's so much simpler. You need to establish, certain measurement period or certain periods of time. So, for example, how many months are we going to measure an employee's hours to determine whether or not they've achieved enough to become full time. Three to twelve months are are your allotments. An administrative period, this is an optional number, an optional period where, you can select, let's say, thirty days, and that's the amount of time that you would use to pull your reports, find out who in that data is considered full time, do the offers of coverage, things like that. And then finally is the stability period. This is the number of months that once an employee measures in as full time, it's the number of months that they remain as full time or are stable. That window is between six and twelve months. Okay? Now, it kind of looks a little bit like this if you're into graphs or pictures or Excel like I am. And this is an example of using a twelve month measurement period with a thirty day administrative period and the stability period starts, then for the next twelve months. So two options. And the reason that's important is because anyone that measures in as full time, even if you've classified them as part time, they get a ten ninety five c form. This is the current 2026 draft form. The IRS has not issued a final form just yet, which is very typical. They may not issue it until November. But this is what that form looks like. And if we dig in a little bit to this form we're not going to dig in a ton because we've got way more ground to cover today the key here is part two, lines fourteen, fifteen, and 16. This is an example of one that I have prepopulated. So, lines fourteen, fifteen, and 16 tell the IRS the story using a series of codes. When I look at these, I should be able to tell, and this is what the IRS is doing, I can tell what that employee life cycle looked like. I can tell when they were hired. I can tell whether they were, offered. Did they enroll, was that offer affordable, all of those things. And then for self insured and level funded plans, we would have more information at the bottom. For fully insured plans, that bottom portion, part, three would be blank. The key here is affordability. Remember, there could be a penalty for not being affordable. And oftentimes what I do see is that an employer will utilize a value in here that isn't what the IRS is looking for. Again, affordability and an employee's contribution that you would put in line for, 15 would be employee only coverage regardless of whether they enroll their spouse or kids and pay the difference. It's employee only coverage for your lowest base ACA compliant plan. So if you offer a base plan and then a couple of buy up plans that are richer and more expensive, The IRS doesn't care if the employee opted into one of those. They want to know what the cost would be for your base plan. So be mindful of what's going in your line fifteen's. Now, when we think about those non ALEs who are sponsoring a self insured level funded plan, we need to be taking a look at B series. So, back to our ALEs and C series, we're reporting on every employee who was full time regardless of whether they were enrolled or whether they waived coverage. For B, because you're not an applicable large employer, we're only worried about creating a form for folks who were enrolled in coverage. So big difference between B and C. Why the big difference? Because there's no employer mandate for small employers. As a small employer sponsoring a self insured or level funded plan, you're kind of acting like the insurer. Okay? Same form an insurer would fill out for their fully insured population. B form is actually super simple. No codes. Simple check boxes is all. Brian, we're running a little low on time. Should we skip this poll and keep going? Yes. I believe we should. Okay. Thank you. I always get so long winded in here. Something that we see often and get questions often is, well, why is it why do I need to send out ten ninety five C forms if the carrier of my fully insured plan is sending out a B form? And the answer is simply because as an ALE, you have your own compliance obligations that differ from a carrier. So yes, if you sponsor a fully insured plan as an ALE, you're going to, have employees that receive a C and a B form. A C from you as is required and a B from the carrier, as is required of a carrier. I want to touch briefly on state health care reporting. So federal filing isn't always the end of the story. A handful of states require, a similar healthcare reporting, based on any employees that you have that reside in one of these five states: California, DC, Massachusetts, New Jersey, and Rhode Island. Now, their their rules are are similar to the ACA, but not a 100%. For all of these states, except Massachusetts, they allow you to use the federal ten ninety five forms for their state healthcare reporting. Massachusetts, they were the front runner. They started this process years and years and years ago, and they have their own special form. So essentially, let's look at California. All employers providing minimum essential coverage to residents of California. So for my employer friends on the call, with us today who have remote employees, if you have employees in California, New Jersey, DC, Massachusetts, you know, you're going to have reporting obligations for those states. I've got slides here, which again, I'm not going to go through in detail just due to timing. These are what are the deadlines, you know, again, can I use ten ninety five forms from federal or do I need to use something special? Massachusetts is the only one that requires something special. It talks a little bit about which of those states require electronic submission. So, when it comes to ACA reporting, what was it, a couple years ago, the rules were changed. If you are if you are filing 10 or more aggregated forms, and this is federal, you have to file electronically. This was a huge, change for small level funded groups that were used to just, you know, doing their five or ten ten ninety five Bs and mailing them in. You can't do that anymore. And for the most part, these states are similar. They either require all, for all sizes, electronic. Others, for example, California, if you have 10 or more, you do have to do electronic. So it's important to, one, understand, and know where your employees reside and do they reside in any of these five states and if so, you want to ensure that you are aware that there are other filing requirements out there, aside from just federal, that there are similar, which we refer to as state health care reporting requirements for those five states. So, rounding out our deadlines, it's important to understand, thank goodness, states mostly adhere to similar, due dates as do the IRS, but they're not always exactly the same. So a few pitfalls to avoid, and kind of think of this as your checklist for common mistakes. Number one, not knowing your ALE status. You've got to make sure you're tight on that, you're confident on that. Number two, make sure you're reviewing your ALE status annually and reviewing employee contributions, how you calculated affordability. You want to calculate that annually because that percentage changes every year. It can go up, it can go down. Sometimes I feel like it goes sideways. You know, you want to to really make sure that you're watching your affordability calculations, excuse me, each year. Another would be make sure you're looking at your part time employees' hours of service monthly, or by establishing a proper measurement period. We walked through those two allowable methods. It's a best practice to pick one and apply it consistently. Make sure if you want to adopt a look back measurement, method that you have documented that, adopted that in your plan document and your summary plan description. And that has to be done respectively. You can't go backwards and do that. So a lot of other, great little tidbits in here. I'm not gonna go through them all because you guys have asked so many questions. I wanna get to some. Some best practices, you know, data. Review your employee counts at least quarterly and make sure your underlying data is clean and accurate prior to getting to ACA, reporting season. Right? You know? And and don't wait till q four necessarily either to figure out your obligations. That's why it's good to to look at these things quarterly. Education is key. We hold tons of webinars like this. I hope that you'll join more, as we go along. Brian, I'm going to dig into the Q and A. Do you want to pop up this one while I look through? I do, and I've launched. it on the side tab. Would scheduling a demonstration of the Mineral HR and compliance platform be helpful for your team? So Mineral is Mitra Tech's HR and compliance platform, and we also have the ACA reporting hub, which is a module within the Mineral platform. So if you'd like to see a demo, please answer, I'd like to schedule a demo. If not, not at this time, totally acceptable. And for the mineral customers on this webinar, if you are utilizing mineral, great. You're all taken care of. But if you're not using the ACA reporting hub and would like to see a demo, why don't you select c and we'll get you connected with, a mineral salesperson, to take a look at it. And with that, I'm gonna close out this poll, and then we'll move on to the next poll, which is and if you just I'll I'll move this slide. If your business has clients who face HR and compliance's challenges, are you interested in exploring a partnership with Mitratech? So at the beginning of the session, I mentioned, you know, we have health insurance carriers, HCMs, technology companies, benefits brokers. If you fall into that category and find that, you would like to help with HR and compliance challenges that your clients are experiencing, this would be a great way to connect with Mitratech, and we can explore what a partnership would look like. Please select a for yes, b for possibly, like more information, or c, not at this time. And I will go ahead and close this out, this poll, and I will return it back to Angela who can go to the questions, what everybody's waiting for. Awesome. I'm gonna get through as many as I can in a short period of time. Okay. So if each business is a separate LLC, do we still need to combine for ALE status? Yes, it's based on ownership. If the same person owns multiple businesses, even if each of those businesses is its own LLC with its own EIN, it's based on ownership. So if there's common ownership there remember my example of Jane yes, you need to count them all together to determine ALE status. Is there a tool available where you can plug in data and have ACA compliance and ALE status figured out? Yeah. At Mineral, we have all kinds of great tools, to do that. What do you do in regard to affordability when you have a remote employee in another state and they must choose the more expensive plan due to being in the network? So, keep in mind that if you may offer multiple plans in general, but if only some or one of those plans applies to your employees that reside in a particular state, then that's basically considered a fair based plan. They don't have any other options. So you want to base affordability and contribution or base contribution on on that. We have three employees total, two of which are partial owners. Do I need to worry about any of this? You would need to worry about this if you have a group plan that is self insured or level funded. You just need to worry about the reporting aspect of it. Oh goodness. Let's see here. What should companies do if they didn't realize they were an ALE with common ownership and didn't file the ten ninety five c forms? The IRS is open for business for tax years all the way back to 2015. My best advice is to work with counsel, and and you do want to get yourself caught up. It's it's always better when you discover the problem and correct it by doing the filings, even if those filings are late, that you do want to work with legal counsel as well, because there will end up being penalties. Alright. And let's see. Brian, are we still active? Okay. Cool. I I wasn't sure if this thing will turn off or if I can keep going a little. bit more. No. You can keep going. Okay. Cool. If y'all wanna stay, I'm gonna go through just a couple more questions because y'all are amazing and ask this. What is the process for electronic delivery of ten ninety fives? So in order to electronically distribute ten ninety five forms to employees, you do need to gather advanced consent. You can't just email them their form, which I don't recommend emailing them their form anyway. There is now the option for the alternative manner of distributing forms. Keep in mind, the alternative manner doesn't mean you just don't have to distribute them and wait until an employee comes and asks you for a paper copy. You want to watch those rules very carefully. In order to use the alternative manner, you need to have a very specifically worded notice placed on your website that tells employees where to go if they want to get a copy. And it basically says, hey, we're not distributing forms, this is the manner in which you can obtain a copy if you want one. That's super high level, but there are very specific forms, and one that throws off employers is the need to put specifically worded messaging on their website, and then there are timelines when someone requests it, how long you have in order to do that. Let's see. Let's see. Let's see. How do I obtain blank forms for 2026? I've looked on the IRS website. So when you go to IRS, irs.gov and you select forms and you go into the search in the search, when you type in 1095, you want to use the little box underneath and go prior years, they are not in order. Just saying. It drives me bonkers. They are not in order. I'm going to do another one. We were an ALE. We were not an ALE in '24, '25, and '26. Do we still need to file ACA? You only need to file ten ninety five c's in the month or in the year following the year you were an ALE. So for example, if you were an ALE based on your 2023 count, you would have filed and then, you know, needed to be in compliance for the twenty twenty four tax year. So it all depends on when you were an ALE versus not. Is this being recorded? Yes, this is being recorded and we will share it with you. For any of you that are already clients of mineral, everything I've talked about and so much more is available in the Mineral platform. There are on demand webinars. Again, our ACA, toolkit has just scabs of great things. So I kept you three extra minutes. I could probably keep you another half an hour, but thank you all so much. We really appreciate you hanging out with us today, being so engaging and answering our polls. Can't wait to see you next month. Brian? Yes. And please join us tomorrow for employment law one zero one. Kara Costello will be, leading the session, and we can we'll continue our mineral thought leadership series in October. Angela will be hosting an open enrollment session. Details to come, so look forward to that. And, have a great day, everyone. Thanks for joining. Goodbye. Bye.