Amwins Connect - August 2024 Question of the Month

Amwins Connect – August 2024 Question of the Month

Question

Our medical plan year is July 1 through June 30. Coming up on our renewal, we now have less than 35 employees, so we do not believe we are an applicable large employer (ALE) required by law to provide medical benefits under the Affordable Care Act. Is this legal, even though we were an ALE and we did provide medical benefits during our previous medical plan year?

Answer

First it is very important to note that determining ALE status is based on a calendar year not an employer’s medical plan year. 

For instance, if the employer averaged 50 or more full-time equivalents during the calendar year 2023, the employer is an ALE for the calendar year of 2024. The calculation should be done again for 2024 to determine status for 2025. 

If the employer chooses to discontinue offering medical coverage while still an applicable large employer, the employer is at risk of penalties under Section 4980H(a).  

Amwins Connect has compliance resources available for you to assist your clients in determining whether or not they must offer minimum essential coverage and affordable medical benefits under the ACA's Employer Mandate rules.

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