WHAT BUSINESS OWNERS SHOULD KNOW ABOUT ACA BENEFITS IN 2022

Benefit advisors need to understand how to help a company that is considered an Applicable Large Employer (ALE), so I want to introduce you to a tool we have on our website, evolvedbenefits.com.

Under the Resources tab, you will find our FTE Calculator. This tool will help you in advising companies that are considered an ALE. An ALE is an employer that has 50 or more full-time employees, or full-time equivalent employees (FTE).

It's important to show an employer what its risk is if the company does not get itself into compliance. Under the rules of ACA, there are penalties for employers who are not offering at least minimum essential coverage.

For example, if we look at an employer with 100 FTE, the monthly penalty cost is just over $16,000 for not having an ACA-compliant health plan in place for their employees. At a 21% tax rate, that's almost a $20,000 a month penalty. When you calculate that over a year, that's over $230,000!

The monthly cost of having those same employees on my $45 minimum essential coverage plan (MEC) is $3,150. In this situation, you actually see a negative tax rate, so the total cost is just under $2,500 per month to have those same employees covered on a health plan with tangible benefits that they can use. The annual cost to the employer is just under $30,000. You're saving your client over $200,000!

What kind of companies are we talking about? Staffing, agribusiness, logistics, warehouses, landscaping, janitorial, cannabis, assisted living facilities, home health care, and many more businesses can make use of this.

There's also a new segment of employees called gig workers. These employees are variable hour employees that work sporadically for a company so their hours may be difficult to track, but if you add these employees together, that company could in fact be considered an ALE and not even know it.

If you use our FTE Calculator you can calculate what the risk exposure is, and that is a definite segue into a meaningful conversation that you can have with the employer.

If you're not the incumbent broker, this is the type of information that would have your prospect questioning their broker, and it may convince them to partner with you.

Always bring value to your clients. I hope to chat with you soon.