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ACA Regulations

ADP helps you stay on top of the latest Affordable Care Act (ACA) rules, regulations and requirements – and how they'll impact you and your business – with updates from experts on the front lines of Health Care Reform..

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Understanding the ACA

Understanding the ACA

The Affordable Care Act (ACA) affects how you design and make health care benefits available to your employees. It’s important to understand ACA requirements and make sure you’re prepared.

As you answered the questions in this quiz, you can see how many factors you need to consider to be ACA compliant - this is extremely complex. According to our 2015 ACA Employer Confidence Study, two-thirds of employers in midsized and large companies believe that the ACA compliance processes will become even more complex in the next two years.

Additionally in the future the stakes will be higher. With the first year of annual reporting, the IRS suspended normal penalty enforcement for those who made good faith efforts to comply, but that won’t be the case for 2016, which brings along with it even more stringent requirements. This combined with the fact that you must now offer affordable coverage to 95% of your eligible employee population (70% last year), means more rigorous tracking is required.

The good news is that you can use the results of the first year of reporting to clean up your data and make sure you are tracking and classifying your employees correctly. This is crucial for compliance. And the best way to be in compliance is to start early.

Here, you can learn more about the ACA—and how ADP can help.

Annual Dollar Limits, Waiting Periods & Pre-Existing Condition Exclusions

Annual Dollar Limits, Waiting Periods & Pre-Existing Condition Exclusions

January 01, 2014

What is the requirement?

For plan years beginning on or after January 1, 2014, employer group health plans may not impose annual dollar limits on essential health benefits, waiting periods of longer than 90 days, or pre-existing condition exclusions.

What's the impact on your business?

These requirements will affect Benefits Administration within your organization.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Mitigate excessive costs based on employment status
  • Aid compliance with waiting period rules

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Automatic Enrollment & Nondiscrimination Rule

Automatic Enrollment & Nondiscrimination Rule

What is the requirement?

Automatic Enrollment: Employers with 200+ full-time employees must automatically enroll new employees in the employer’s group health plan. Nondiscrimination: Insured employer group health plans may not discriminate in favor of highly compensated employees.

What's the impact on your business?

Automatic Enrollment and the Nondiscrimination Rule will affect Benefits Administration within your organization.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Automatically enroll new hires into group health plans
  • Report exceptions on the enrolled employee population
  • Aid compliance with automatic enrollment and nondiscrimination requirements
Dependent Coverage

Dependent Coverage

January 01, 2014

What is the requirement?

If an employer provides coverage to dependents, they must permit dependent children up to age 26 to remain covered under their group health plan.

What's the impact on your business?

The Dependent Coverage requirement will affect Benefits Administration within your organization.

How ADP can help

While the deadline to begin implementing this requirement has passed, dependent coverage will be an ongoing compliance challenge for employers. ADP’s Human Capital Management solutions help:

  • Reduce costs associated with ineligible plan participants
  • Reduce premium overpayments
  • Promote compliance with coverage requirements

Related Information

“Costs and the HR Compliance Burden Are Going Up for Employer-Sponsored Healthcare” – From ADP Research Institute: “HR Compliance: Are Employers Ready for Health Care Reform?”

Webinar: Health Care Reform: Strategies to Help Control Costs, Mitigate Risk & Decrease Penalties

Expanded Women’s Preventive Care Services

Expanded Women’s Preventive Care Services

What is the requirement?

Plans renewing on or after August 1, 2012, that cover preventive health services for women are expanded to include, with no cost-sharing: well-woman visits; gestational-diabetes screening; domestic- and interpersonal-violence screening and counseling; FDA-approved contraception methods, and contraception education and counseling; breastfeeding support, supplies and counseling; HPV DNA testing for women age 30 and older; sexually transmitted infections counseling for sexually active women; and HIV screening and counseling for sexually active women.

Flexible Spending Account (FSA) Annual Limit

Flexible Spending Account (FSA) Annual Limit

January 01, 2013

What is the requirement?

For plan years beginning on or after January 1, 2013, a $2,500 limit applies to employee healthcare FSA contributions.

What's the impact on your business?

The FSA annual limit will affect Benefits Administration within your organization.

How ADP can help

While in most cases the deadline to begin implementing this requirement has passed, the FSA annual limit will be an ongoing compliance challenge for employers. ADP’s Human Capital Management solutions help:

  • Aid compliance with FSA requirements
  • Reduce administrative burden of communicating FSA limits to employees
  • Boost employee engagement by improving communication and increasing participation
  • Reduce benefits costs via consumer-driven or high-deductible health plans, while consolidating multiple spending accounts vendors

Related Information

“IRS Guidance on Group Health Plans That Fail to Cover Hospitalization, Physician Services, and the ACA “Minimum Value” Requirement” - From Eye on Washington

“Employee Benefits Communications: There’s Room for Improvement” - From ADP Research Insitute: “Health Care Programs: Employee Benefits Selection Can Be Made Easier Through Technology”

HIPAA Certification

HIPAA Certification

What is the requirement?

Employer group health plans must certify that the plan’s data and information systems are in compliance with HHS rules for certain electronic transactions.

Medical Loss Ratio (MLR) Rebates

Medical Loss Ratio (MLR) Rebates

What is the requirement?

Employers must distribute MLR rebate dollars to enrollees, use the rebate to reduce future participant premiums, or use the rebate to enhance plan benefits. ERISA trust rules may apply.

What's the impact on your business?

The MLR Rebates requirement will affect Benefits Administration within your organization.

How ADP can help

While the rebates attributable to 2011 have been distributed, MLR rebates will be an ongoing compliance challenge for employers. ADP’s Human Capital Management solutions help:

  • Reduce the administrative burden of rebate distribution calculations
  • Increase employee satisfaction and engagement with timely and detailed answers
  • Optimize rebate dollars most effectively to reduce total cost of healthcare

Related Information

“How is the MLR Rebate Calculated” – From Eye on Washington

“Costs and the HR Compliance Burden Are Going Up for Employer-Sponsored Healthcare” – From ADP Research Institute: “HR Compliance: Are Employers Ready for Health Care Reform?”

Retiree Prescription Drug Expenses

Retiree Prescription Drug Expenses

What is the requirement?

No deductions allowed for employers that receive federal subsidies for retiree prescription drug expenses.

Wellness Incentives

Wellness Incentives

January 01, 2014

What is the requirement?

For plan years beginning on or after January 1, 2014, permitted wellness incentives increase from 20% of cost of coverage to 30% (up to 50% if the wellness program is established for the purpose of tobacco use prevention or reduction).

What's the impact on your business?

Wellness Programs can affect Benefits Administration within your organization.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Reduce employer costs of healthcare
  • Improve employee engagement and accountability for healthcare costs
  • Gain access to wellness best practices and business case templates for investment

Related Information

“Wellness Program Guidance Released”| From Eye on Washington

Infographic: “How Wellness Programs Help Employers Control Healthcare Expenses” – From ADP Research Institute: “Why You Should Care About Wellness Programs”

Webinar: “The Power of Wellness Programs: Fact or Fiction in an Uncertain Future of Escalating Health Care Costs”

2014 Employer Shared Responsibility

2014 Employer Shared Responsibility

January 01, 2014

What is the requirement?

Employers with 50 or more full-time employees plus full-time equivalent employees, must offer affordable, minimum essential coverage of minimum value or potentially be subject to tax penalties.*

Penalties and reporting requirements will not apply in 2014. Penalties will not be imposed in 2015 (and months in 2016 in the 2015 plan year) on employers with 50-99 full-time employees and full-time equivalent employees as long as those employers do not restructure their workforce or change their health coverage in 2014-2015. For employers with 100 or more full-time employees and full-time equivalent employees, transition relief applies for 2015 (and months in 2016 in the 2015 plan year) under which the employer will not be assessed the penalty if it offers coverage to at least 70% of its full-time employees.

What's the impact on your business?

The Employer Shared Responsibility requirement will affect Employer Taxes and Fees.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Manage Shared Responsibility requirements through an integrated approach to workforce planning and administration, including benefits, payroll, reporting and reconciliation, and time and labor management
  • Mitigate risk related to cost of benefits and employee burden levels
  • Aid compliance regardless of company size
  • Reduce practitioners’ administrative burden in determining wage levels

Related Information

"Delay Announced for Penalties and Reporting Requirements of the Employer Shared Responsibility Provisions" – From Eye on Washington

"Affordable Care Act (ACA) Update Series: Which Employers are Subject to the Share Responsibility Provisions?" – From Eye on Washington

"Mitigate Your Exposure to ACA ‘Shared Responsibility’ Penalties" – From ADP Research Institute: "Planning for Health Care Reform: How Income Impacts Employee Health Benefits Participation"

Learn more about our Affordable Care Act solutions for businesses like yours.

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

2015 Employer Shared Responsibility

2015 Employer Shared Responsibility

January 01, 2015

What is the requirement?

Employers with 50 or more full-time employees plus full-time equivalent employees, must offer affordable, minimum essential coverage of minimum value or potentially be subject to tax penalties.

Note: Penalties will not be imposed in 2015 (and months in 2016 in the 2015 plan year) on employers with 50-99 full-time employees and full-time equivalent employees as long as those employers do not restructure their workforce or change their health coverage in 2014-2015. For employers with 100 or more full-time employees and full-time equivalent employees, transition relief applies for 2015 (and months in 2016 in the 2015 plan year) under which the employer will not be assessed the penalty if it offers coverage to at least 70% of its full-time employees.

What's the impact on your business?

The Employer Shared Responsibility requirement will affect Employer Taxes and Fees.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Manage Shared Responsibility requirements through an integrated approach to workforce planning and administration, including benefits, payroll, reporting and reconciliation, and time and labor management
  • Mitigate risk related to cost of benefits and employee burden levels
  • Aid compliance regardless of company size
  • Reduce practitioners’ administrative burden in determining wage levels

Related Information

“Affordable Care Act (ACA) Update Series: Which Employers are Subject to the Share Responsibility Provisions?” – From Eye on Washington

“Mitigate Your Exposure to ACA ‘Shared Responsibility’ Penalties” – From ADP Research Institute: “Planning for Health Care Reform: How Income Impacts Employee Health Benefits Participation”

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Annual Health Care Reporting: Forms 2094-C and 1095-C

Annual Health Care Reporting: Forms 2094-C and 1095-C

January 01, 2015

2016
What is the requirement?

If you have at least 50 full-time employees (including full-time-equivalent employees) you’ll report information about your employer-sponsored health care offered to your full-time employees and other applicable individuals to the IRS using Forms 1094-C and 1095-C. You must distribute copies of Form 1095-C to your full-time employees, which has information they may need to complete their personal tax filing. Forms must be distributed no later than January 31 for the previous calendar year.

Also, Forms must be filed annually with the IRS, no later than February 28 (or March 31 if filed electronically) for the previous calendar year.

What's the impact on your business?

Forms 1094-C and 1095-C must be distributed and filed or you face penalties. 

How ADP can help

ADP’s  ACA solutions help:

  • Consolidate the information required by Forms 1094-C and 1095-C
  • Aggregate data from disparate systems (payroll, time, benefits)
  • File and distribute these forms for you

Related Information

“IRS Releases Final ACA Reporting Forms and Instructions” — from Eye on Washington

“New Guidance on Electronic Filing of Affordable Care Act (ACA) Information Returns” — from Eye on Washington

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Excise Tax on High-Cost Plans (“Cadillac Tax”)

Excise Tax on High-Cost Plans (“Cadillac Tax”)

January 01, 2018

What is the requirement?

If group health coverage exceeds certain thresholds, the employer will be subject to a 40% Excise Tax on the cost of benefits exceeding the applicable cost limits. The anticipated cost limits for 2018 are $10,200 for individual coverage and $27,500 for family coverage.

What's the impact on your business?

The “Cadillac Tax” will affect your Employer Taxes and Fees.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Determine if and how the Excise Tax will affect your business
  • Aid compliance with Excise Tax requirements

Related Information

“Costs and the HR Compliance Burden are Going Up for Employer-Sponsored Healthcare” – From ADP Research Institute: “HR Compliance: Are Employers Ready for Health Care Reform?”

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Form W-2 Reporting

Form W-2 Reporting

What is the requirement?

Employers that issued 250 or more Forms W-2 in the preceding calendar year must include the cost of group health coverage provided to employees on Form W-2 beginning with the 2012 tax year, which were provided to employees in January 2013. Employers must also confirm payroll systems are set up to track and include this figure on Forms W-2 when printed. One entry will show total costs for BOTH employee and employer contributions.

What's the impact on your business?

The Form W-2 Reporting requirement will affect your Payroll and Income Taxes.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Increase compliance with Form W-2 requirements
  • Reduce risk of penalties for incorrect Forms W-2 (i.e., $50 per)
  • Reduce administrative burden of year-end payroll processing and validation
  • Engage your most important asset—your people—via access to Employee & HR Service Center

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” – From ADP Research Institute: “Employer Challenges Go Beyond Health Care Reform”

Webinar: Health Care Reform: Strategies to Help Control Costs, Mitigate Risk & Decrease Penalties

Insurance-Carrier Industry Fee

Insurance-Carrier Industry Fee

What is the requirement?

Fee for fully insured plans to fund insurance exchange subsidies begins.

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Managing Exchange Notices

Managing Exchange Notices

2006
What is the requirement?

Even if you’re extending an ACA-compliant employer-sponsored benefits plan to your employees, an employee still might shop for a different plan through a public Marketplace Exchange — particularly if their income level qualifies them for a subsidy. If any of your employees apply for coverage through the Exchange and are deemed eligible for a premium tax credit, you'll receive a Marketplace Notice. When this happens, you need to review and decide if you’ll appeal (if appropriate), or just wait for an IRS penalty notice.

Appealing a Marketplace Notice triggers a mountain of research and paperwork, and responding to notices  generally requires three pieces of information:

Appealing an Exchange Notice triggers a mountain of research and paperwork, and responding to notices generally requires three pieces of information:

  • Proof the employee was offered coverage
  • Proof coverage was affordable and provided minimum value

Proof of your employee’s wages

Once you’ve gathered the right information, a reconciliation process filled with paperwork begins – and time is ticking. You have a relatively short time frame to share paperwork with the Exchange, and review and revise as necessary. If your appeal succeeds, you could avoid IRS fines. However, the government may try to reclaim subsidy money from the employee.

What's the impact on your business?

Your organization should have a strategy on how to handle Marketplace Notices.  Marketplace Notices will be sent to the employer address provided by your employees so each location should be prepared to know what to do when a Marketplace Notice is received.

How ADP can help

ADP’s ACA solutions help:

  • Track and manage Marketplace Notices
  • Manage the appeals process for you
  • Reconcile/Manage Penalties

Learn more about our Affordable Care Act solutions for businesses like yours.

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Medicare Tax on Wages and Unearned Income

Medicare Tax on Wages and Unearned Income

What is the requirement?

Medicare tax on wages increases by 0.9. Applies to those earning $200,000 if filing single, $250,000 if married filing jointly, and $125,000 if married filing separately.

What's the impact on your business?

The Medicare tax will affect your Payroll and Income Taxes.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Calculate and withhold the additional income tax
  • Conduct analysis of payroll and deductions for those high-income earners who are affected
  • Improve accuracy and reduce risk of penalties

Related Information

“IRS Issues Guidance on Additional Medicare Tax” – From Eye on Washington

“Costs and the HR Compliance Burden Are Going Up for Employer-Sponsored Healthcare” – From ADP Research Institute: “HR Compliance: Are Employers Ready for Health Care Reform?”

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Patient-Centered Outcomes Research Fee

Patient-Centered Outcomes Research Fee

What is the requirement?

A federal tax designed to help fund the Patient-Centered Outcomes Research Institute, which examines the effectiveness of clinical outcomes, or the “comparative effectiveness” of hospitals and doctors. This provision requires self-insured medical plans and commercial health insurers to pay a fee beginning with plan years ending on or after September 30, 2012. In year one, the fee is $1 per covered person; in year two, the fee is $2 per covered person. In subsequent years, the fee is indexed to medical inflation. Fee payments are due July 31, 2013 for plan years ending in 2012 (i.e., calendar year plans).

What's the impact on your business?

The PCORI Fee will affect Employer Taxes and Fees.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Aid compliance with research fee requirements
  • Reduce administrative burden of calculating or auditing research fees

Related Information

“Costs and the HR Compliance Burden Are Going Up for Employer-Sponsored Healthcare” – From ADP Research Institute: “HR Compliance: Are Employers Ready for Health Care Reform?”

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Payroll-based Journal

Payroll-based Journal

What is the requirement?

Section 6106 of the Affordable Care Act requires nursing facilities to electronically submit direct care staffing information (including agency and contract staff) to the Centers for Medicare & Medicaid (CMS). The data, when combined with census information, can then be used to not only report on the number of staff in each nursing home, but also to report on employee turnover and tenure, which can impact the quality of care delivered.

CMS has developed a system for submitting this information called Payroll-based Journal (PBJ). Quarterly PBJ submissions are due 45 days after the close of each quarter, with the first quarter report (covering July-September 2016) due by November 14, 2016.

What's the impact on your business?

Failure to comply with the reporting, or to adequately staff key positions in your facility, can result in a lower Five-star Quality Rating, and may impact your ability to receive Medicare and Medicaid payments.

How ADP can help

ADP has created reporting options that can be used to extract staffing data from ADP Time and Labor Management solutions. ADP clients using the following products can contact their ADP representative for more information about the PBJ reporting options:

• ADP Vantage HCM Time®
• ADP Enterprise eTIME®
• ADP Workforce Now® Essential Time
• ADP Workforce Now® Enhanced Time
• Pay eXpert® with ezLaborManager®

Not a Time and Labor Management client yet?

Small Business (1-49 employees)
Midsized Business (50-9999 employees)
Large Business (1000+ employees)

Related Information

CMS website: Nursing Home Quality Initiative > Staffing Data Submission PBJ

Reinsurance Fees

Reinsurance Fees

What is the requirement?

Reinsurance fees begin (through 2016) for all employers providing coverage to fund state programs to stabilize premiums in the individual market.

Related Information

“Health Care Reform: Addressing HR Compliance Challenges Requires an Integrated Approach” - From ADP Research Insitute: “Employer Challenges Go Beyond Health Care Reform”

Employee Notice of Coverage Options

Employee Notice of Coverage Options

October 01, 2013

What is the requirement?

Employers must provide new and current employees with a notice describing availability of Exchange coverage.

What's the impact on your business?

The Notice of Exchange requirement will affect your Employee Communications.

How ADP can help

ADP’s Human Capital Management solutions help:

  • Aid compliance with exchange notice requirements
  • Reduce administrative burden of communicating exchange options to employees
  • Empower employees with access to Employee & HR Service Center

Related Information

“Health Insurance Exchanges” – From Eye on Washington

“Employee Benefits Communications: There’s Room for Improvement” – From ADP Research Institute: “Healthcare Programs: Employee Benefits Selection Can Be Made Easier Through Technology”

“Play or Pay” Individual Mandate

“Play or Pay” Individual Mandate

October 01, 2013

What is the requirement?

Most taxpayers must obtain minimum essential coverage for themselves and their dependents or be subject to tax penalties.

Summary of Benefits and Coverage (SBC)

Summary of Benefits and Coverage (SBC)

October 01, 2013

What is the requirement?

Insurers and self-insured group health plans must provide SBCs for annual enrollment periods beginning on or after September 23, 2012, and upon certain other events, such as special enrollments.

What's the impact on your business?

The SBC requirement will affect your Employee Communications.

How ADP can help

While in most cases the deadline to begin implementing this requirement has passed, SBC communication will be an ongoing compliance challenge for employers. ADP’s Human Capital Management solutions help:

  • Aid compliance with SBC requirements
  • Reduce administrative burden of communicating SBCs to employees
  • Empower employees with access to coverage-related information

Related Information

“Update: Additional Frequently Asked Questions Issued Regarding Summary of Benefits and Coverage Requirements” – From Eye on Washington

“Insourcing vs. Outsourcing Benefits Administration: What’s the Best Approach for your Organization?” - From ADP Research Institute: “Benefits Administration: Should You Outsource or Manage In-House?”

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