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Health and Benefits 101
Guidebook

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Question 7

How does the Affordable Care Act (ACA) affect health benefits purchases?

The ACA has been the law of the land in the United States since 2010. It also has some compliance challenges for U.S. businesses. Even for small companies, the ACA has an impact on the type of approved health care coverage that carriers can offer.


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Here are a few ACA highlights that can affect the employer-sponsored medical benefits you want to offer to your employees:

  1. Starting in 2015, businesses with 50 or more full-time or full-time-equivalent (FTE) employees must provide ACA-approved health insurance or face a penalty under the ACA’s Employer Mandate provisions.

  2. A full-time employee, eligible for employer-sponsored health benefits as defined by the ACA, is an employee who works 30 hours a week (or 130 hours a month).

  3. Your employer-sponsored health care plan must offer:

    • Minimal essential coverage
      The equivalent of government and employer-provided coverage that meets ACA standards (check the list at www.healthcare.gov or www.cms.gov).

    • Minimum value
      Pays at least 60% of a plan participant’s medical expenses.
  1. Reporting requirements – There are several key reports. For example, starting in 2016, all employers who provide health coverage must report to the IRS certain information regarding the individuals their health plan covers

  2. There are significant ACA penalties for noncompliance – all of which are not tax- deductible.
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Keep In Mind

This information only begins to provide all you need to know about the Affordable Care Act. The ACA law is large and complex. It affects virtually every business. You should visit key government websites (Health and Human Services, IRS, etc.) or the website of an ACA-certified service provider for more in-depth information about the ACA.


More Info:

ADP provides access to information and guidance regarding the ACA. Check out these two resources: Small Business Insights or Research for Health care Reform.


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The information contained in this website represents the products and services available through one of the business groups of Automatic Data Processing Insurance Agency, Inc. (ADPIA). ADPIA services mid and large size clients with various insurance products and services through its other business groups.

All insurance products will be offered and sold only through Automatic Data Processing Insurance Agency, Inc., its licensed agents or its licensed insurance partners, 1 ADP Blvd., Roseland, NJ 07068. CA license # 0D04044. Licensed in 50 states. Automatic Data Processing Insurance Agency, Inc. is an affiliate of ADP, LLC. Certain services may not be available in all states. Certain services are provided through the carrier partners and an additional carrier fee may apply. ADP and the ADP Logo are registered trademarks of ADP, LLC. Copyright © 2016 ADP, LLC.