Q: If an employer is an Applicable Large Employer (ALE) with 50+ employees, when can they start using the new 2024 affordability rate of 8.39% if their plan renewal is on April 1st, 2024?

A: The 2023 affordability rate remains valid for the entire plan year. Therefore, it applies until March 31st, 2024. The new 2024 rate of 8.39% can be used starting from April 1st, 2024.

Q: When are employers required to include the cost of healthcare on W-2 forms? What if there are 3 companies in the control group?

A: Employers who issue 250 or more W-2 forms for the 2023 year must include the cost of healthcare. Note that not all employees receive W-2 forms. The count includes all W-2 forms issued by the 3 companies in the control group. Each company is required to record health insurance costs on the W-2 forms.

Q: Do Section 125 plans need to be renewed annually?

A: Renewal is not mandatory every year. However, it’s advisable to consult with the plan administrator to ensure all documentation aligns with current practices and to identify any necessary changes.

Q: Can a parent or employee use FSA funds to pay for a COBRA plan if their child, who turned 26, is terminated from the parent’s plan?

A: No. Once the child turns 26, they will typically be terminated from most plans. COBRA coverage, if chosen, must be paid with after-tax dollars and cannot be funded through FSA. However, HSA funds can be used for COBRA payments.

Q: Is a domestic partner treated the same as a spouse for health insurance and related benefits?

A: No. Post-2015 DOMA Act recognizes all marriages, including same-sex marriages. Choosing to remain as domestic partners, instead of marrying, means a different legal status. This distinction excludes domestic partners from receiving COBRA benefits if the partnership dissolves.

Q: Are all employers required to file 1095 & 1094 forms electronically in 2024 for the 2023 reporting year?

A: Starting January 1st, employers must count all forms submitted to the IRS in total. This includes W-2, 1099, 1095, and 1094 forms. If the total exceeds 10 forms, electronic filing through AIR (ACA Information Returns) is required. Employers may consult their payroll company or accountant for assistance in electronic filing.

Q: For ACA, COBRA, MSP, etc., how do you count group size if an employer has both union and non-union employees?

A: Union employees, even if insured through their union, are still counted as employees of the employer. Therefore, include all employees in the total count.

Group Size Requirements:

• COBRA: 20+ Employees
• MSP: 20+ Employees
• ACA: 50+ Employees

Q: What is the stability period under the ACA?

A: For an ALE with 50+ employees, the ACA mandates offering plans that meet minimum essential, minimum value, and affordability standards to at least 95% of full-time employees. Employers must set a look-back measurement period or a monthly measurement period, followed by an administrative (open enrollment) period, and a stability period (plan year). Full-time employees must be offered coverage at the start of the administrative period. For example, if an employee worked full-time for 12 months and then switched to part-time, they are still entitled to coverage for the stability period of the year they work part-time. If they were full-time in 2023 and reduced hours in 2024, they would retain coverage for the entirety of 2024.

Cosmo Insurance Agency can assist with navigating and ensuring compliance with these complex requirements.