ACA

A layoff changes the ACA numbers, not just the payroll.

ACA rules turn on counts of full-time employees. A reduction in force changes those counts, and the filings that depend on them.

Talk to Us About This

The Counts

Where headcount shows up.

Large-Employer Status

Employers averaging 50 or more full-time employees, counting full-time equivalents, in the prior year are generally subject to the employer mandate. The prior year sets status, so a layoff does not change it overnight.

Reporting

Applicable large employers generally file Forms 1094-C and 1095-C, including for employees who left during the year.

Final Offers

Offer codes for the months before a separation still have to be reported accurately on each employee’s form.

In Practice

How it plays out.

Suppose an employer averaged just over 50 full-time employees, counting full-time equivalents, last year and lets a number of them go this year. Its status for this year is still set by last year’s count, so the mandate and the reporting duties generally continue for the year.

What changes is the data. People who worked part of the year still appear on the 1095-C for the months they were employed, with the right offer information for each month. Separations in the middle of a month are a common source of coding errors.

A reduction in force can also change next year’s status. The count for next year will use this year’s months, so the layoff belongs in planning, not just in this year’s filing.

The Support

How we help.

A broker should take work off a smaller HR team, not add to it.

Headcount Check

We help review full-time counts before and after the reduction.

Clean Records

We help make sure termination dates in payroll and enrollment support the 1095-C data.

Filing Support

We can help with the filing, using your plan and enrollment data.

First Steps

Before year-end.

Recount Full-Time Staff

Count full-time employees and full-time equivalents for each month, not just at year-end.

Tie Separations to Coverage

Match each separation date to the month coverage ended.

Check Offer Coding

Review the offer and coverage codes for anyone who left mid-year.

Plan for Next Year

Estimate whether the new count changes next year’s status.

Common Mistakes

Mistakes that cost money.

Using the Year-End Count

ACA status uses monthly counts averaged over the prior year, not one snapshot.

Dropping Departed Employees

Anyone employed during the year can need a form, even if they left early.

Mid-Month Separations

A separation partway through a month can change the code for that month, so check each one.

Let’s Get to Work

Is HR carrying more than it should?

Tell us what changed, and we will show you what to take off the desk.

What to bring

Your renewal letter
Your census
Your current plan documents
Your renewal date

Rough answers are fine. We build the numbers from there.

Sources

Laws and rules referenced

ACA employer shared responsibility: 26 U.S.C. § 4980H

ACA employer reporting: 26 U.S.C. § 6056

CFH Insurance Consultants

An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.

Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →

Michigan41000 Woodward Avenue, Suite 350 East
Bloomfield Hills, MI 48304
248.370.8853
Colorado13540 Northgate Estates, Suite 100
Colorado Springs, CO 80921
719.425.2649
Texas16365 Park Ten Place, Suite 182
Houston, TX 77084
281.404.5670

Book a 30-minute call