The Affordable Care Act (ACA) introduced significant health insurance regulations that impact businesses of all sizes. For Idaho employers, maintaining ACA compliance is essential to avoiding penalties, ensuring legal adherence, and providing employees with access to affordable healthcare coverage.

At The Shandro Group, we specialize in helping Idaho businesses navigate ACA requirements, implement cost-effective health insurance solutions, and stay compliant with both federal and state laws. This guide outlines the key components of ACA compliance, employer responsibilities, and best practices for ensuring adherence to regulations.

Why ACA Compliance Matters for Idaho Employers

The ACA requires certain employers to offer health insurance coverage to employees or face penalties. Compliance is crucial for several reasons. Employers that fail to comply may face substantial fines from the IRS. Businesses that provide competitive health benefits are more attractive to potential hires, making ACA-compliant coverage a key part of recruitment and retention strategies. Offering ACA-compliant insurance ensures employees receive access to essential health benefits, improving overall workforce health. Employers may also be eligible for tax credits and other financial incentives for offering coverage that meets ACA guidelines.

Failing to meet ACA requirements can result in significant financial penalties, making it essential for Idaho employers to understand their responsibilities and take proactive measures to ensure compliance.

Employer Responsibilities Under the ACA

The ACA applies differently to businesses depending on their size. Employers generally fall into two main categories based on the number of full-time employees or full-time equivalents (FTEs) they have.

Applicable Large Employers (ALEs) – 50 or More Full-Time Employees

Businesses with 50 or more full-time employees or FTEs are considered Applicable Large Employers (ALEs) and must comply with specific ACA regulations. These employers are required to provide Minimum Essential Coverage (MEC) to at least 95 percent of their full-time employees and dependents. Health plans offered by ALEs must meet minimum value standards, meaning they must cover at least 60 percent of healthcare costs, including essential health benefits. Employer-sponsored plans must also be affordable, meaning an employee’s premium contribution cannot exceed a set percentage of their household income, which is adjusted annually. ALEs must also file IRS reporting forms, including Form 1095-C to employees and Form 1094-C to the IRS, to document compliance.

Failure to meet these requirements can result in significant financial penalties, making compliance essential for any business classified as an ALE.

Small Employers – Fewer Than 50 Full-Time Employees

Businesses with fewer than 50 full-time employees are not required to offer health insurance under the ACA. However, small businesses may still benefit from participating in health insurance programs that lower costs and provide tax advantages. The Small Business Health Options Program (SHOP) allows small businesses to purchase affordable group health insurance. Employers with fewer than 25 full-time employees may also qualify for the Small Business Health Care Tax Credit, which can help offset premium costs. Some small employers opt to provide Individual Coverage Health Reimbursement Arrangements (ICHRAs), which allow them to reimburse employees for individual health insurance policies instead of offering a traditional group plan.

Although small employers are not legally required to provide health insurance, offering benefits can improve employee retention and competitiveness in the job market while taking advantage of cost-saving opportunities.

ACA Compliance Requirements for Idaho Employers

Offering ACA-Compliant Health Plans

Employers who provide health insurance must ensure their plans comply with ACA regulations. Health plans must include essential health benefits, such as preventive care, hospitalization, prescription drugs, maternity care, and mental health services. Employer-sponsored plans must also meet affordability guidelines, ensuring employee contributions do not exceed the percentage limit of their household income set by the IRS each year. Family plans must offer coverage for dependents up to age 26.

Employers should regularly review their health insurance plans to ensure they continue to meet ACA minimum standards and remain financially sustainable for both the company and employees.

Filing ACA Reporting Forms

Employers must submit specific IRS forms each year to verify their compliance with ACA regulations. ALEs must provide employees with Form 1095-C, which details the health insurance coverage offered to them. They must also file Form 1094-C with the IRS, summarizing the health coverage provided to their workforce. Small businesses that offer self-funded health insurance plans must submit Form 1095-B to employees and Form 1094-B to the IRS.

Employers must distribute the necessary forms to employees by January 31 each year, while filings with the IRS must be completed electronically by March 31. Failure to file these forms on time can result in costly penalties per employee, so it is critical for businesses to stay on top of these deadlines.

Understanding ACA Employer Shared Responsibility Penalties

Employers classified as ALEs who fail to comply with the ACA may be subject to Employer Shared Responsibility Payments (ESRP). Businesses that do not offer coverage to at least 95 percent of their full-time employees may be required to pay a substantial penalty per employee, excluding the first 30 employees. If an employer offers health coverage that does not meet affordability or minimum value standards, they may also face additional penalties if any employees receive subsidized coverage through the health insurance marketplace.

To avoid penalties, employers should regularly review their coverage options and contribution structures to ensure compliance with ACA guidelines.

Best Practices for ACA Compliance in Idaho

Track Employee Hours Accurately

Employers must track full-time employees and FTEs to determine whether they meet the 50-employee threshold for ALE classification. Businesses should monitor work hours carefully to ensure they are providing benefits to all eligible employees and correctly classifying their workforce.

Work With an Employee Benefits Consultant

ACA compliance can be complicated, especially for businesses that offer multiple health plan options. A benefits consultant can help employers select ACA-compliant health plans, ensure affordability standards are met, assist with IRS reporting, and implement cost-saving strategies such as tax credits and reimbursement arrangements. Working with a consultant helps businesses simplify compliance and optimize health benefits while managing costs effectively.

Use HR Technology to Automate Benefits Administration

Employers can reduce administrative burdens by using HR technology to automate employee eligibility tracking, benefits enrollment, payroll deductions, and ACA reporting. An automated system helps minimize errors, prevent missed deadlines, and improve overall efficiency.

Review Health Plans Annually

Health insurance regulations and ACA guidelines change frequently. Employers should review their health plans, contribution structures, and compliance status each year to ensure they continue to meet ACA requirements. Keeping plans affordable and up to date is essential for long-term compliance.

Why Work With The Shandro Group for ACA Compliance?

At The Shandro Group, we help Idaho businesses navigate ACA compliance while optimizing their health benefits. Our services include reviewing ACA compliance status, selecting affordable and compliant health insurance plans, assisting with ACA reporting and IRS filings, implementing HR technology solutions, and identifying cost-saving opportunities for businesses.

Whether your business is an ALE subject to ACA mandates or a small business looking for affordable coverage options, we provide expert guidance to help you stay compliant while maximizing financial savings.

Final Thoughts on ACA Compliance for Idaho Employers

Ensuring ACA compliance is essential for Idaho employers to avoid penalties, provide competitive health benefits, and maintain a strong workforce. By tracking employee eligibility, offering ACA-compliant plans, meeting IRS reporting deadlines, and leveraging cost-saving strategies, businesses can successfully manage ACA obligations.

For expert ACA compliance assistance, contact The Shandro Group today. Our team is committed to helping Idaho businesses stay compliant, control costs, and implement effective health benefits solutions.