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If your U.S.-based business is expanding and you’re approaching the 50-employee mark, congratulations! Growth is an exciting milestone. And if you’ve long passed the 50 or even 100 EE mark, welcome. However, a larger and growing workforce also comes with new responsibilities, including meeting the requirements of the Affordable Care Act (ACA).
If your company qualifies as an Applicable Large Employer (ALE), you’ll need to offer health benefits that comply with federal regulations to avoid steep penalties against your business. But where do you start? We’re here to guide you through the process, step by step.
The first step is confirming whether your business is considered an ALE. Under the ACA, an ALE is any company with 50 or more full-time employees, including full-time equivalents. Employees working at least 30 hours per week or 130 hours per month count as full-time. To calculate your total, combine the hours of part-time and seasonal workers to determine if they equate to full-time equivalent employees. Tools like the ACWise ALE calculator can make this step easier.
If you are a business that relies on gig-workers, seasonal fluctuations in hiring, or part-time workers, this can be confusing. You may not have the same headcount month-to-month, but you’ll need to understand this formula to calculate correctly for year end reporting.
This may bring up questions around common ownership of different businesses under one entity. If the larger organization is determined to be an ALE then the individual businesses within the group are also subject to ALE standards. Regardless of the total number of employees, these individual businesses will share the responsibility of Employer Shared Responsibility Payment (ESRP) as part of ACA. If you're still not sure if you qualify as an ALE, visit the FAQs: ACA and ALE from SBMA, a leading healthcare provider in the United States for clarification.
As an ALE, you are required to:
So what is affordable coverage and how is it calculated? The ACA bases this calculation on household income and that number changes from year to year. For 2025, contributions cannot exceed 9.02% of the employee's household income, which is a significant increase from the 8.39% in 2024. If you do not have the household income for each employee, it’s assumed only the annual income of the employee will be taken into account. For more detailed information regarding affordability calculations, read here.
Failing to meet these requirements can result in steep penalties. For 2025, the penalty for not offering coverage is $2,970 per employee annually. If your coverage doesn’t meet affordability or minimum value standards, the penalty rises to $4,460 per employee. These numbers highlight the importance of compliance for your continued business success.
Selecting the right health plan can feel overwhelming, but understanding your options makes it manageable. Consider these approaches:
Compliance also means keeping your paperwork in order. Your hiring and annual healthcare benefits renewal process should be streamlined with the correct forms ahead of reporting time. This means getting to know the Employee Retirement Income Security Act (ERISA) Reporting and Disclosure requirements.
Make sure to provide employees with the following:
These documents ensure transparency and help employees understand their benefits. Meridio strives to lift the administrative burden by handling most of this administrative paperwork, enrollment, on-going support, and renewal so you can focus on your business at hand.
As an ALE, you’ll need to file reports with the IRS. Understanding when to file is key to avoiding the penalties you’re trying to save from your bottom line. All U.S.-based ALEs must file the appropriate IRS forms for the 2024 tax year no later than February 28th, 2025 or March 31st, 2025.
Here’s a breakdown of a few of the forms you may be required to file:
Note there may be more forms required for ALE filing, refer to the Brown and Brown 2024 Employee Benefits Compliance Guide. These filings are essential for proving compliant filings and avoiding penalties.
The ACA prohibits discrimination in favor of highly compensated employees. Annual nondiscrimination testing for cafeteria plans ensures that benefits are equitably distributed across your workforce. This test is calculated by the aggregate of nontaxable benefits provided to key employees and the nontaxable benefits provided to all remaining employees. Those in the key employee group must not exceed 25% of aggregate nontaxable benefits offered to all employees. Other tests around self-funded plans, FSAs, and term life insurance may be included.
If you’re unsure how to conduct this testing, the Levitt Group has a detailed explanation of requirements and calculations. Otherwise consult with your benefits provider or a compliance expert.
Regularly review updates from reliable sources like the Department of Labor and IRS to stay informed about changes that may impact your benefits reporting requirements. Healthcare regulations are constantly evolving and the recent changes to two laws have simplified the ACA reporting process for employers, AP managers, and HR admins alike.
In summary, the Paperwork Reduction Act no longer requires employers to mail every qualified employee their tax forms prior to January 31st. Moving forward the paperwork must be supplied within 30 days of the request.
The second law passed was the Employer Reporting Act, which involves changes to the taxpayer identification number reporting process, the response timing for Letter 226 which is now 90 days from the date of the ESRP notice, as well as changes to the statute of limitations and electronic delivery. Review the detailed breakdown and checklist for ALEs from McDermott, Will and Emory regarding more on both these laws.
Compliance isn’t just about avoiding penalties; it’s about supporting your team with meaningful benefits to ensure longevity and a positive work culture. Employees are the backbone of your business, and offering comprehensive health coverage shows you value their well-being. Moreover, competitive benefits help attract and retain top talent, fueling your company’s continued growth.
At Meridio, we understand the challenges of managing employee health benefits. That’s why we’ve designed ACA-compliant plans that are easy to implement, affordable, and flexible. Our plans come with transparent pricing and personalized support to help you navigate compliance with confidence. Whether you’re just starting out or scaling your business as an ALE, Meridio is here to help.
Implementing compliant health benefits doesn’t have to be daunting. With a clear process and the right partner, you can support your employees while meeting federal requirements. Ready to simplify your health benefits? Visit Meridio to explore our solutions and get started today.
While it might sound like just another trendy term, it’s a serious issue that can impact your team’s well-being and productivity.
Burnout is a state of emotional, physical, and mental exhaustion caused by prolonged stress. It can sneak up on anyone, especially in unstable environments with toxic work culture. According to Forbes, 80% of Americans say they feel stressed at work. If you’ve noticed your employees losing their spark, they might be experiencing burnout. Recognizing burnout early is key to keeping your team on track. Here are some common signs:
Low Energy Levels
An increased drop in enthusiasm or detachment from work and colleagues. If a team member who is usually full of energy is suddenly dragging through the day, that could be a red flag.
Productivity Slumps
Missing deadlines, reduced quality of work, or lack of focus are all classic signs that a team member may be struggling with burnout.
Physical Symptoms
Headaches, stomach issues, or frequent illnesses can be more obvious signs of underlying stress. WellRight also notes that symptoms like panic attacks, chest pains, an increased heart rate and changes in appetite, leading to weight loss or gain can also be a common sign of employee burnout.
Social Withdrawal
When an employee starts withdrawing from social interactions or avoiding meetings and team activities, it’s time to check in.
Concerned about your team’s well-being? Learn how Meridio’s health insurance plans offer comprehensive mental health coverage.
A research conducted by Monster in April 2024 found that 78% of workers don’t think their employer is doing enough to address their mental wellness at work. The key to preventing burnout is balance, with an overall goal of creating an environment where your team can thrive. Here’s how:
Encourage Breaks: It’s not just about the lunch hour. Regular breaks throughout the day are necessary to maintain focus and energy.
Promote Flexibility: Offering flexible work hours or locations can help employees manage stress.
Recognize Achievements: Acknowledge and reward your team’s hard work. A little appreciation goes a long way in boosting morale.
Maintain Open Communication: Make sure your team knows they can talk about their workload and mental health without fear of repercussions.
Provide Mental Health Resources: Ensure your team knows about any mental health support your company provides, from counseling services to stress management workshops.
Leverage Health Insurance Coverage: Highlight the mental health services covered by your company’s health insurance plan. Comprehensive coverage that includes therapy, counseling, and other mental health resources can be a crucial support system for your employees.
Looking to support your team’s mental health? Explore our Guide to Preventing Employee Burnout
While Mental Health Month is a great reminder, mental health shouldn’t be a once-a-year conversation. Recognizing the signs of burnout and taking proactive steps can keep your team motivated and productive year-round.
At Meridio, we offer healthcare plans that prioritize mental health coverage. Our Value Medical plans include access to therapy and psychiatry anytime, anywhere through Recuro Health. Contact us today to find out how to get started with Meridio.
As a thriving business with a growing workforce, the complexities of health insurance and employee benefits shouldn't be your full-time headache. We understand that knowing the wellbeing of your workforce lies in your hands can feel daunting, but we're here to help.
The renewal period for these benefits is a crucial time to reassess, evaluate, and make decisions about your coverage offering that will not only impact your bottom line but also the long-term wellbeing of your team.
Here is a comprehensive checklist to guide you through the renewal process smoothly and effectively:
Before jumping into new plans or options, take a moment to assess your current benefits package:
Are your employees satisfied with their health coverage? Consider conducting anonymous surveys to gather feedback on what they value most about their existing plans.
Examine aspects such as the network of providers, out-of-pocket costs, and additional benefits like dental or vision coverage. Understanding your team's needs is essential for making informed decisions during your renewal.
Ask your broker or health benefits carrier to provide a claims history from the past year. Analyze the types of services your employees are utilizing most and assess the costs associated with those claims. This will help you identify trends and potential areas for improvement in finding affordable health coverage.
A thorough review of the services used by your team can empower your decisions and help you negotiate better terms with your insurance carriers. This also allows the opportunity to add supplemental coverages and wellness programs if needed, based on the claims history for your team.
Determine what you can realistically afford in terms of renewal costs. Account for premium increases, but set a clear budget and cap on your spend. If you elect for employee contribution, be sure you understand what that covers and how it affects your employees.
Consider how changes in premiums will affect your overall financial expenses. While providing valuable benefits is important, balancing costs with business sustainability ensures long-term success.
Once you have your budget, start comparing different plans and see how they stack up against what you're currently offering. Look beyond just the premium costs; evaluate the coverage, network access, co-pays, deductibles, and out-of-network options.
Partnering with a knowledgeable managed service provider like Meridio can save you time and ensure you explore all possibilities without the headache and complexity of navigating the market. They can help you find the best health benefits for your company.
Incorporating wellness programs can effectively enhance employee participation in your benefits program while reducing long-term healthcare costs. Consider options that promote physical and mental well-being, such as fitness reimbursements, stress management workshops, or telehealth services.
These initiatives not only attract new talent but help retain current employees by fostering a supportive work environment where employee wellness is a priority. Research shows that when considering a new position, prospective employees often choose affordable health benefits over better pay.
Health benefits are heavily regulated, with changes in the market occurring yearly. Ensuring that your plans comply with the latest Affordable Care Act (ACA) regulations will help you avoid hefty penalties. Another way to ensure your business is compliant is by partnering with a managed service provider such as Meridio. They simplify the benefits process and take care of everything from administration and set-up to enrollment and ongoing service.
Staying informed about changes in healthcare laws protects your business from potential penalties and legal issues. Consider consulting with a compliance expert to navigate complex areas if you don’t have a reliable broker or health partner.
Before the renewal process begins, effectively communicate with your employees about all expected plan changes and create a space for everyone to ask questions and review the new options. Hold an informal meeting and send out digital updates with enrollment reminders to ensure everyone is on the same page.
Giving your employees time to discuss health coverage options with their household and family allows everyone a fair chance to waive or elect benefit coverage. Provide materials that outline the new benefits, highlighting any modifications, costs, and important deadlines. This transparency fosters trust and helps your employees feel valued.
Health benefits should not be a once-a-year consideration. Make it a habit to periodically review your offerings throughout the year. Economic conditions, employee demographics, and market trends can shift, so staying adaptive is crucial. Speak with experts who can walk you through a cost comparison and answer questions to help guide your healthcare decisions. At Meridio, their experts help you understand your current costs versus average marketplace options to see where you could save or spend differently.
Regular check-ins with your existing health benefits carrier or broker can help you make more timely adjustments. Keep them on a first-name basis and rely on them to be your guide in the benefits space, being transparent with your business needs and expectations will go a long way.
After you've completed your health benefits renewal, solicit feedback from your employees about the new plans and the enrollment process. Understanding how these changes affect your team's daily lives and productivity is critical for future decisions.
Use this insight to improve the benefits package during the next renewal cycle. Keeping an open line of communication with your team as the year progresses will allow you to have a clear picture of the wellness culture within your organization.
Renewing employer-paid health benefits is a significant opportunity to enhance your team's welfare and safeguard your business's financial bottom line. By following this checklist and staying empathetic to your employees' needs, you can create a low-cost benefits package that not only meets compliance requirements but also builds a strong, loyal workforce.
Your team's well-being is an investment that pays dividends for your organization's success! Download our free 'Benefits Renewal Red Flags' checklist below to be sure you're on top of the best health insurance options for your team.
As a business owner, your team’s well-being directly impacts the success of your business. Providing quality health benefits is more than just an added perk; it’s an investment in your workforce’s happiness, health, and productivity. But with so many options on the table, shopping for health insurance can feel overwhelming.
In this guide we will walk you through 10 questions you should ask when shopping for health benefits to ensure the coverage is a good fit for your team. By addressing these key considerations, you can make informed decisions that benefit your workforce and your business in the long run.
1. What Health Insurance Plans Are Available?
Start by exploring the range of health plans on the market. Look for coverage options that include medical, dental, vision, and mental health services. Assess whether the plans align with your team’s unique needs. If you’re unsure, ask your employees for input—a quick survey can provide valuable insights into their priorities.
2. How Much Will It Cost?
Understanding costs is crucial. Analyze the premium contributions, deductibles, co-pays, and out-of-pocket expenses for each plan. Strive to find a balance between affordability for your business and value for your employees. Clear communication about cost-sharing arrangements will also help set expectations for your team. Don’t just read the benefits summary, get on the phone with your recommended health insurance expert. They will be able to guide you to coverage best fit for your team..
3. Are Flexible Plan Options Available?
Not all employees have the same needs. Some may require family coverage, while others prefer individual plans. Offering flexibility can significantly improve employee satisfaction and participation rates. Look for providers that allow you to customize options based on the diverse requirements of your workforce. Doing so can mean the difference between employees enrolling or waiving coverage.
4. What Is the Provider Network Like?
The quality of a health plan often depends on its network. Ensure the plans you’re considering include a wide range of doctors, specialists, and hospitals. Accessibility to reputable providers gives your team peace of mind and ensures they can receive the care they need without hassle. Ask your plan provider or benefits guide for a provider look-up, or coverage map and allow your team to review their current and prospective doctors within the new plan network.
5. Are Wellness Programs Included?
Wellness programs are a great way to support your team’s overall health and potentially lower healthcare costs. Look for plans that include initiatives like fitness challenges, stress management workshops, and nutrition counseling. These programs promote healthy habits and can enhance employee engagement.
6. How Is Prescription Medication Covered?
With nearly 65% of U.S. adults taking at least one prescription medication daily, comprehensive prescription coverage is a must. Investigate how the plan handles different types of medications, including generic and brand-name drugs. Clear details about copays and coverage levels will help employees feel confident in their benefits. Ask to see full lists of coverage tiers and access to a digital look-up, provide this to your team so they can research privately before making their decision on the benefits offering.
7. Are Retirement and Savings Plans Available?
While health insurance is a priority, don’t overlook other benefits like retirement savings plans. Options such as 401(k)s or Roth IRAs contribute to your team’s financial security and long-term job satisfaction. Including these benefits in your offerings can set you apart as a top-tier employer.
8. How Is Coverage Administered?
Smooth administration is key to a successful benefits program. Ask about the enrollment process, whether an online portal is available, and how claims are managed. The easier it is for employees to navigate their benefits, the more likely they are to use them effectively. Don’t forget about ongoing billing, be sure you get clear answers on who is responsible for this reporting.
9. Is Employee Support Available?
Health insurance can be complicated, and your team may have questions or concerns. A dedicated support system, such as a hotline or knowledgeable representatives, can help employees understand their coverage and resolve issues quickly.
10. What Are the Enrollment Periods?
Deadlines matter when it comes to health insurance enrollment. Make sure you’re aware of the enrollment periods and communicate them clearly to your team. Providing ample time and resources for decision-making ensures everyone has the opportunity to choose the plan that works best for them.
Finding affordable health benefits for your small business may seem daunting, but asking the right questions can simplify the process. By focusing on affordability, flexibility, and comprehensive coverage, you’ll create a benefits package that supports your team’s well-being and strengthens your business. For help finding the best small business health benefits plans, download our cheat sheet below.
