An ACA Compliance Checklist for Small Business

June 12, 2019by Alex Strautman

The Affordable Care Act (ACA) has a long list of requirements for small businesses. To help you keep track, we created an ACA Compliance Checklist.


Budget Considerations

  • Use a Group Size Calculator to determine whether your business had an average of 50+ full-time (FT) plus full-time equivalent (FTE) employees in the prior year. If so, your business is an Applicable Large Employer (ALE) subject to the ACA Employer Mandate during the next business year. An FTE Calculator is available from your agent or on the website.
  • If your business is an ALE, you can use an Affordability Calculator to determine whether your health coverage meets one of the ACA Affordability Safe Harbor guidelines. If it does not, your business is subject to an ACA penalty. More information on the ACA’s Affordability Safe Harbors is available here.
  • Collect accurate Dates of Birth for dependents under age 21. Effective 1/1/2018, insurance carriers can charge one single rate for dependent children ages 0 to 14 years old and unique rates for dependents ages 15-20. Carriers may only charge for the three oldest dependent children under age 21.
  • If your business just reached the 50+ FT plus FTE threshold for the first time, ask about eligibility for transition relief from the employer penalty, if you offer Minimum Essential Coverage with Minimum Value to your employees.
  • Confirm you are not paying directly or reimbursing employees for individual health plans, unless you sponsor a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA).
  • Review the impact of upcoming minimum wage increases on your employees’ affordability of coverage calculations and your overall company budget.

Health Plan Administration

  • Verify your waiting period does not exceed the 90-day limitation.
  • If you have an orientation period prior to your waiting period, confirm it is no longer than one month.
  • If you have 50+ FTEs with variable hours who may or may not work full-time, it is important to consider the lookback measurement method as well as administrative and stability periods. Click here for guidance on the IRS website.
  • Review Health Flexible Spending Account (FSA) documents to make sure they reflect the current limit ($2,700 in 2019) and include any grace period/carryover provision.
  • If your business has difficulty meeting carrier participation guidelines, you may want to talk with your agent about the ACA’s annual one-month Special Open Enrollment Window (SEOW), when eligible small groups can enroll in coverage without having to meet standard employer-contribution and/or employee-participation ratios. The SEOW occurs November 15-December 15 each year, allowing groups to enroll for coverage effective January 1.
  • Confirm you are applying a 30-hour full-time definition to determine employee eligibility for coverage.
  • Confirm you have not changed employees to 1099 status to avoid the ACA employer mandate.
  • Determine if use of Professional Employer Organization (PEO) or staffing agency personnel increases your group size to 50+ FTEs due to IRS common law employee rules.

Employee Documents

  • Deliver Department of Labor Mandated Notice (New Health Marketplace Coverage Options and Your Health Coverage) to new employees within 14 days of hire.
  • Deliver Summary of Benefits and Coverage (SBC) and Uniform Glossary to employees at enrollment, renewal, and to new hires.
  • Deliver 60-day notices of modification, if you make plan changes outside of renewal.
  • If you had average of 50+ FT plus FTE employees in 2018, prepare to give copy of IRS Form 1095-C (for 2019) to FT employees by 1/31/2020.

While not all of the items apply to every small business, this Checklist may be useful in determining how you can stay in compliance with the ACA.


More Help Available

If you have additional ACA compliance-related questions, talk with your employee benefits agent.


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