So, today’s business mail has a letter from the IRS waiting for you. Those are always awesome. You open the envelope and read something about the tax year 2021 and:
“Dear Employer:
Our records show you may have been an Applicable Large Employer (ALE) and therefore are required to file certain information returns.”
Wait… what?
Though there have been a few changes since its inception in March of 2010, many employers are still unaware that they have been deemed by the IRS to be an ALE and are left scrambling to figure out what that means and what actions need to be taken in response to the Affordable Care Act (ACA).
What is an ALE? An ALE is an employer with an average of at least 50 full-time employees, including full-time equivalent employees. A full-time equivalent employee is determined from hours worked by variable hourly employees as an ALE, along with being required to provide affordable minimum essential coverage (MEC) for health insurance or face penalties assessed by the IRS. An employer must also report to the IRS each year regarding that coverage or face additional penalties from the IRS.
Letters like the one I describe above are the result of the IRS not having a record of the associated year-end forms required to be submitted by an ALE. Another letter an employer might receive is related to the Employer Shared Responsibility Provision where a penalty is assessed. In either case, having good record-keeping practices is a MUST because both letters can be from several tax years in the past.
When our payroll clients elect to have their health benefits administered by ConceptHR, we assist clients with not only record keeping but also providing copies and contesting penalties. To date, ConceptHR’s benefits department has been able to successfully abate more than a million dollars in ESRP penalties for benefits clients.
Are you unsure about your group’s ALE status? Are you interested in having market reviews performed for your existing coverage? As a payroll client of ConceptHR, our benefits department is available to provide the benefits assistance necessary to navigate the ACA landscape.
Autumn Stevens serves as the Insurance and Benefits Coordinator at ConceptHR, bringing over 15 years of specialized experience to her role. Autumn has guided countless businesses through the complexities of compliance and benefits optimization, with a special expertise in the Affordable Care Act. Her unwavering commitment to God and her goal-oriented approach has earned her a reputation for excellence and integrity in her field, establishing her not just as an authority in her domain, but as a trusted partner.
If you have questions about today’s article or any HR issue you are having, please email info@concepthr.com.
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