5 Important Employer Steps for ACA Compliance Reporting in 2023

1. Adjust to a Lower Affordability Threshold

The ACA imposes an employer shared responsibility payment (ESRP) on any ALE that offers qualifying coverage to its full-time employees, but for which the employee share of the cost for the lowest tier self-only coverage option is deemed unaffordable. The ACA bases affordability on an employee's household income and indexes the percentage annually for inflation.

2. Be Aware of the Affordability Safe Harbors

An ALE typically does not know an employee's overall household income, so federal regulators created three (3) safe harbors that may use to judge whether an offer of coverage is affordable:

• W-2 safe harbor
• Rate of Pay safe harbor
• Federal Poverty Line safe harbor

3. Recognize that ESRP Penalty Amounts Continue to Rise

4. Calendar the Form 1094-C/1095-C Deadlines

• For the 2022 reporting cycle, ALEs must furnish individual statements to full-time employees by no later than March 2, 2023.
• ALEs must file applicable reports with IRS by no later than Feb. 28, 2023, if filing by paper, or by no later than March 31, 2023 if filing electronically (which is mandatory for ALEs filing more than 250 forms).

5. Use Current Draft ACA Reporting Forms

[ Source https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/5-most-important-steps-for-2023-aca-compliance-planning.aspx [9/20/22]