Are you Ready for End-of-Year ACA Reporting?

As 2017 ends, it’s time to start thinking about whether or not you need to complete end-of-year reporting to be compliant with the Patient Protection and Affordable Care Act (ACA).

ACA reporting for 2017 is due in early 2018, so now is the time to start preparing and assembling the necessary information.

However, it’s difficult to know if the ACA applies to your organization and if you have to report anything.

If you’re an Applicable Large Employer (ALE), then you have to report all information about your full-time employees. If you’re an employer offering self-funded plans, then you have to report all pertaining information about your covered employees. 

How do you Know if You’re an ALE?

First, let’s define what an ALE is. An ALE is any company or organization that has an average of at least 50 full-time employees or full-time equivalent (FTE) employees.

Whether an employer is an ALE is determined each calendar year, and generally depends on the average size of an employer’s workforce during the prior year. If an employer has at least 50 full-time employees, including FTE employees, on average during the prior year, the employer is an ALE for the current calendar year, and is therefore subject to the employer shared responsibility provisions and the employer information reporting provisions.

Now, let’s define full-time employees and FTE employees.

Full-Time Employees

For purposes of the ACA, an employee is a full-time employee for a calendar month if he or she averages at least 30 hours of service per week. Under the final regulations, for purposes of determining full-time employee status, 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week.

FTE Employees

Some employers will use multiple people to work the same number of hours as a single, full-time person. This can make creating work schedules easier, allow for just-in-time scheduling, and a host of other benefits. Authors of the ACA were concerned, however, that employers would make some positions part-time and hire more staff at part-time hours to avoid some of the requirements of the ACA. To prevent that, the law requires that you add to your count of full-time staff the number of full-time equivalent positions (FTEs) in your organization.

An employer determines its number of FTE employees for a month in the two steps that follow:

  1. Combine the number of hours of service of all non-full- time employees for the month, but do not include more than 120 hours of service per employee.
  2. Then divide the total by 120.

An Additional ALE Consideration

In some situations, companies with fewer than 50 FTE employees will have to provide health insurance as an ALE because of their corporate governance structure. Parent-subsidiary relationships are one such example. Though each subsidiary company may have fewer than 50 FTE employees, if the parent company is responsible for a number greater than 50, then all the subsidiaries of the parent are considered ALEs.

Similarly, if two companies are owned by the same owner or set of owners, and the owners are responsible for 50 or more FTE employees between the two companies, both are considered ALEs. To illustrate, a venture capital firm owns a majority stake (at least 80 percent) in five companies, and each company employs 11 FTE employees. Each of the five companies and the venture capital firm are ALEs, because the sum of the entire organization is greater than 50.

It’s not Easy

If you are an ALE, then you get the privilege of reporting information on your health insurance and employees. Compiling and filling out all the forms for end-of-year ACA reporting is very difficult to do on your own, and can be a headache to deal with. However, below are a couple of tips to follow to ensure that you do it all correctly and efficiently.

Find Someone you can Trust

Since ACA reporting is so complicated, it can be beneficial to have an outside organization or person handle the reporting for you. Find someone you can trust who can consult with you about how to correctly do your reporting, or will do the reporting themselves. Obviously, these reports contain highly sensitive information, so choose someone you know will handle it with care and honesty.

Today, there are many organizations that have the expertise and knowledge to accurately and honestly do your ACA reporting for you.

Look to Last Year

If you were an ALE last year, then the reporting will virtually be the same as what you did in the past.

However, if your organization has expanded or gotten smaller, then that might have changed your ACA status, so make sure you are confident on where your organization falls.

In the end, it all comes down to whether or not you’re an ALE. If you are, then ACA reporting is required in order to be compliant. While this is no easy task, third-party organizations are willing and able to help you through the process, and set you up for success in 2018.

Are you prepared for ACA reporting this year?

Are regulations really increasing? View our infographic

Pat Gagne

Pat Gagne, FLMI, Vice President of Benefits for Aureon HR, brings more than 35 years of experience in the field of employer group insurance benefits to Aureon HR's team. Having owned and run a small Iowa-based employer for 25 years prior to joining Aureon HR, Pat brings a small employer's perspective on benefit plans, compliance issues and customer service.


December 6, 2017

Posted by

Pat Gagne


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