Three Key Considerations for Large Employers
Compliance News
Thursday, May 09 2024
(April 23, 2024) Early in the year is the time for employers who are approaching or over 50 employees to document and update the “key components” of being a larger employer, to ensure that no compliance obligation is missed.
The world of human resources is fast-paced, and it’s easy to overlook compliance requirements, especially if they are new to you or you are new to your organization. Following are three key considerations for larger employers.
First, determine if you will have any 5500 obligations for your health and welfare plans (this is a separate obligation from the 401(k) 5500s). You do this by determining how many employees are enrolled on the first day of the plan year for your plans subject to ERISA (including Medical, Dental, Vision, Group Term Life and Disability Insurance). If any one of those plans have more than 100 employees enrolled on the first day, you will be obligated to file a 5500 for that year. Your local Alera Group office can assist you with finding a partner for your 5500s and determining how many 5500s you are responsible for (your ERISA plan documents will play a part in that determination).
Second, if you are an applicable large employer (ALE), which means you have 50 or more full-time or full-time-equivalent employees, you are obligated to offer affordable, minimum value, minimum essential coverage to every full-time employee. There are three ways to calculate affordability. Alera Group can assist you with these calculations and provide you with a PPACA Affordability Calculator.
Third, if you are an ALE, you must track hours of all of your employees — even if you are confident everyone works 30 hours a week or more — and you must use either the monthly measurement method or the look-back measurement method. Your tracking results dictate which employees need to receive a 1095-C and how to handle leaves of absence.
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The world of human resources is fast-paced, and it’s easy to overlook compliance requirements, especially if they are new to you or you are new to your organization. Following are three key considerations for larger employers.
First, determine if you will have any 5500 obligations for your health and welfare plans (this is a separate obligation from the 401(k) 5500s). You do this by determining how many employees are enrolled on the first day of the plan year for your plans subject to ERISA (including Medical, Dental, Vision, Group Term Life and Disability Insurance). If any one of those plans have more than 100 employees enrolled on the first day, you will be obligated to file a 5500 for that year. Your local Alera Group office can assist you with finding a partner for your 5500s and determining how many 5500s you are responsible for (your ERISA plan documents will play a part in that determination).
Second, if you are an applicable large employer (ALE), which means you have 50 or more full-time or full-time-equivalent employees, you are obligated to offer affordable, minimum value, minimum essential coverage to every full-time employee. There are three ways to calculate affordability. Alera Group can assist you with these calculations and provide you with a PPACA Affordability Calculator.
Third, if you are an ALE, you must track hours of all of your employees — even if you are confident everyone works 30 hours a week or more — and you must use either the monthly measurement method or the look-back measurement method. Your tracking results dictate which employees need to receive a 1095-C and how to handle leaves of absence.
To Read More, Click Here