ACA ACA Employer Mandate & Workplace Benefits 1 — Questions and Answers
Question 1: Under the ACA employer mandate, how many full-time equivalent employees must an employer have to be considered an Applicable Large Employer (ALE)?
- 25 or more
- 50 or more (Correct answer)
- 100 or more
- 75 or more
Correct answer: 50 or more
An Applicable Large Employer (ALE) under the ACA is defined as an employer with 50 or more full-time equivalent employees in the prior calendar year.
Question 2: What IRS form must ALEs file annually to report information about health coverage offered to full-time employees?
- Form 1094-B
- Form 1095-A
- Form 1094-C (Correct answer)
- Form W-2
Correct answer: Form 1094-C
ALEs must file Form 1094-C (transmittal) along with Form 1095-C for each full-time employee to report health coverage information to the IRS.
Question 3: Under the ACA, what is the minimum value standard that employer-sponsored health plans must meet?
- The plan must cover at least 50% of the total allowed costs
- The plan must cover at least 60% of the total allowed costs (Correct answer)
- The plan must cover at least 70% of the total allowed costs
- The plan must cover at least 80% of the total allowed costs
Correct answer: The plan must cover at least 60% of the total allowed costs
ACA minimum value requires that an employer-sponsored plan pay at least 60% of total allowed costs for a standard population.
Question 4: What is the ACA affordability threshold for employer-sponsored coverage based on in 2024?
- Coverage must cost no more than 9.02% of the employee's household income
- Coverage must cost no more than 8.39% of the employee's household income (Correct answer)
- Coverage must cost no more than 10% of the employee's household income
- Coverage must cost no more than 7.5% of the employee's household income
Correct answer: Coverage must cost no more than 8.39% of the employee's household income
For 2024, employer-sponsored self-only coverage is considered affordable if the employee's required contribution does not exceed 8.39% of household income.
Question 5: Which penalty under ACA Section 4980H(a) applies when an ALE fails to offer minimum essential coverage to at least 95% of its full-time employees?
- The 'B' penalty triggered per uninsured employee
- The 'A' penalty triggered if at least one full-time employee receives a premium tax credit (Correct answer)
- A flat $2,000 fine per company
- No penalty applies unless all employees are uninsured
Correct answer: The 'A' penalty triggered if at least one full-time employee receives a premium tax credit
The 4980H(a) 'A' penalty is triggered when an ALE fails the 95% offer requirement and at least one full-time employee receives a premium tax credit on the Marketplace.
Question 6: For ACA purposes, a full-time employee is defined as one who works an average of how many hours per month?
- 100 hours per month
- 120 hours per month
- 130 hours per month (Correct answer)
- 160 hours per month
Correct answer: 130 hours per month
The ACA defines a full-time employee as one who works on average at least 130 hours of service per calendar month.
ACA ACA Employer Mandate & Workplace Benefits 1
Under the ACA employer mandate, how many full-time equivalent employees must an employer have to be considered an Applicable Large Employer (ALE)?