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Tax Tips for Large Employers, Small Employers, & Self-Insured Plans


The Internal Revenue Service (IRS) offers the following tax tips and reminders for large employers, small employers, and employers sponsoring self-insured health plans regarding their responsibilities under the Affordable Care Act (ACA).   

Applicable Large Employers Employers with 50 or more full-time employees (including full-time equivalent employees or FTEs) are generally considered to be "applicable large employers" (ALEs) subject to the employer shared responsibility ("pay or play") provisions of the ACA. (Note: These requirements are delayed until 2016 for ALEs with 50 to 99 full-time and FTE employees who certify that they meet certain eligibility criteria. However, ALEs with at least 100 full-time and FTE employees are generally subject to pay or play beginning in 2015.)
Whether an employer is an ALE is determined each calendar year based on employment and hours of service data from the prior calendar year. Employers can find information about determining the size of their workforce in Q&As from the website and in the related final regulations.

In addition, starting in 2016 ALEs must report to the IRS information about the health care coverage (if any) they offered to their full-time employees for calendar year 2015, and must also furnish related statements to their full-time employees. Employers are reminded that, for 2014, the IRS will not assess pay or play penalties, and information reporting is voluntary.

Small Employers Nothing in the ACA penalizes small employers (those with fewer than 50 full-time employees) for choosing not to offer health coverage to any full-time employee. However, the IRS reminds small employers with fewer than 25 full-time equivalent employees that they may be eligible for the small business health care tax credit, which is designed to encourage small businesses to offer health coverage to their employees. The tax credit estimator can help employers determine if they qualify for the credit, and if so, how much the credit might be worth.
Employers Sponsoring Self-Insured Plans According to the IRS, if an employer sponsors a self-insured health plan, it must report to the IRS certain information about its health insurance coverage for each covered employee (regardless of its number of employees). For 2014, this information reporting is voluntary.

Additional Information To find out more about applicable large employers, pay or play, information reporting, and the small business health care tax credit, employers are encouraged to visit

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