Health care reform legislation enacted in March of 2010, referred to as the Affordable Care Act (ACA), is perhaps the most massive and most complex HR compliance challenge for employers in U.S. history. ACA requirements are different based on the size of your organization. A national survey concluded that only half of the small (1-49 employees) and mid-sized (50-999 employees) employers felt confident they understood the regulations and that their HR departments were complying.

The law is designed to increase federal oversight of health care plans and make health insurance more accessible to the public. Insurance companies, health care providers, and the media can be the source of great confusion and frustration for both employers and employees. As regulations continue to develop, Strategic Benefit Solutions will keep you up to date on how these changes affect your employees and your benefit programs.

The ACA remains in place after being struck down by federal court

On Dec. 14, 2018, a federal judge ruled in Texas v. United States that the entire Affordable Care Act (ACA) is invalid due to the elimination of the individual mandate penalty in 2019. The decision was not stayed, but the White House announced that the ACA will remain in place pending appeal.

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Employers underestimated the time and work needed to comply with ACA regulations and administration. If you or your team similarly struggle, it may be a chance to consider outside assistance to help shoulder your regulatory demands. The laws vary according to how many full-time employees an employer has, and the penalty for not meeting ACA compliance can be stiff. Your benefit consultant with Strategic Benefit Solutions will advise you on the most cost effective options for your company to achieve these requirements.


Under health care reform, small businesses with 49 or fewer full-time-equivalent employees aren’t required to offer health insurance and are not subject to potential tax penalties. If you choose to provide coverage, small business exchanges and financial assistance will be available to make this easier. If you decide not to offer coverage, your employees will still be able to buy individual coverage.

As a small business, you have several options to consider:

  • Continue purchasing group health care coverage directly from an insurer
  • Make coverage available to your employees through the Small Business Health Options Programs(SHOP)
  • Offer neither group coverage nor access to the SHOP – sending your employees to the individual marketplace page for your state
  • Evaluate the addition of a Qualified Small Business HRA
  • If you’re a larger small business with part-time workers – or a subsidiary of a larger organization – you’ll need to determine whether you’re subject to the ACA’s employer shared responsibility regulations
  • Make sure you’re limiting contributions to flexible spending accounts (FSA) per annual limits
  • Provide written notice about the Health Insurance Marketplace to employees


Employers with more than 50 full-time employees (or full-time equivalents) must offer health insurance that is both affordable and provides minimum value to 95% of their full-time employees and their children up to age 26. This is known as the employer mandate. Employers who fail to offer coverage to at least 95% of full-time employees and dependents will be subject to a penalty.

A plan provides “minimum value” if it pays at least 60% of the cost of covered services (considering deductibles, copays, and coinsurance). Plans purchased from carriers that are designed in accordance with the mandates of the Affordable Care Act will meet this requiremnet.

Coverage is considered “affordable” if employee contributions for employee-only coverage do not exceed a certain 9.5% of an employee’s household income (value adjusted each year). Based on IRS safe harbors, employers can assume coverage is affordable if the cost of self-only coverage is less than 9.5% of one of the following:

  • W-2 Method – Employee’s W-2 wages
  • Rate of Pay Method – Employee’s monthly wages calculated as 130 hours x Rate of Pay
  • Federal Poverty Level Method – Federal Poverty Level for a single individual