Reform Q&A

Below are the most frequently asked questions. You can also view all or search the Reform Q&A

Click to skip to the answer


Please advise the proper answer to  4980H Affordability Safe Harbor. At the moment the coverage was offered the lowest pay in our company was $ 19,780.00 per year and the cheapest insurance plan we offer is set at $ 36.358 per week or $ 1,890.62 per year.

According to guidelines listed on the form it should be not more than 9.5% of FPL (which is $ 1,118.15 per year) or 9.5% of annual pay (which is $1,879.10). As it shows our charge for the cheapest insurance plan exceeds the max limit of affordability by $ 11.52 therefore we do not qualify for 4980H Affordability Safe Harbor.

Please advise if my calculations and understanding of this matter is correct.


Your calculations and understanding are correct.  You will not meet affordability guidelines.  

That is incorrect.  Texas did not expand Medicaid Eligibility; therefore, Texas’ threshold is 15%.

Texas Medicaid and CHIP Eligibility Levels

To view the modified adjusted gross income (MAGI)-based eligibility levels, expressed as a percentage of the federal poverty level (FPL) and by monthly dollar amount and family size for Medicaid and CHIP, visit the National Medicaid and CHIP Eligibility Levels page for more information.

The answer to your question is yes.  The report is based on a calendar year, therefore, if the group is 50 or more in size, then the employer will report on the first 11 months with the grandmother plan, then one month of the new ACA compliant plan.  If the employer is under 50 in size, then the insurer will report for the group, unless the employer is self-funded then the employer will report.

Below shows how to determine if the employer is a Applicable Large Employer (ALE).


Basic Information

  • Two provisions of the Affordable Care Act apply only to applicable large employers (ALEs): 
  • The employer shared responsibility provisions; and
  • The employer information reporting provisions for offers of minimum essential coverage
  • Whether an employer is an ALE is determined each calendar year, and generally depends on the average size of an employer’s workforce during the prior year. If an employer has fewer than 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is not an ALE for the current calendar year. Therefore, the employer is not subject to the employer shared responsibility provisions or the employer information reporting provisions for the current year. Employers who are not ALEs may be eligible for the Small Business Health Care Tax Credit.
  • If an employer has at least 50 full-time employees, including full-time equivalent employees, on average during the prior year, the employer is an ALE for the current calendar year, and is therefore subject to the employer shared responsibility provisions and the employer information reporting provisions.
  • To determine its workforce size for a year an employer adds its total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each calendar month of the prior calendar year and divides that total number by 12.

Yes, churches must comply with the employer mandate if they are an Applicable Large Employer (ALE), which means they have 50 or more full-time employees and/or full-time equivalents (FTEs). 

No, this rule has nothing to do with the ACA, nor does it have anything to do with the insured’s age.  Generally, if the group has less than 20 employees, Medicare is primary.  Therefore, Anthem can carve-out what Medicare B would have paid and pay as the secondary carrier.

This is how the IRS defines a controlled/aggregated group.  If one of these are met below, then yes these companies would be considered an Applicable Large Employer (ALE), and must comply with the Employer Mandate.

The IRS also addresses this issue in the Internal Revenue Code Sections 414(b) and 414(c).  These regulations create three classes of controlled groups:  

  • A Parent Subsidiary relationship is created whenever a parent organization owns 80% or more of the equity in a subsidiary organization or where any two of the five owns more than 50% of the equity in both of the trades or businesses. The subsidiary organization may be another corporation, a group of corporations, partnership(s), or LLCs.  They are all to be treated as a single employer under PPACA.
  • A Brother-Sister common control group exists wherever the same five or fewer persons (counting individuals, estates and trusts as "persons") collectively own 80% or more of the equity in two separate trades or businesses.  
  • Additionally, there is the "affiliated service group" rule (IRS Code Section 414(m)). That rule defines “affiliated service groups as applicable to organizations such as law firms, accounting firms, civic organizations, temporary staffing companies and third party administrators.  The regulation applies when separate organizations linked by at least 10% common ownership and the organizations closely allied in the services they provide.