aca safe harbor definition
The safe harbor guidance – which employers may but are not required to follow – is found in IRS Notices 2012-58 (on determining full-time employees) and 2012-59 (on the waiting period), both issued on August 31, 2012. W-2 wages (which employers know) instead of each employee’s household income. (which employers generally would not know), the safe harbor could provide a more. workable and practical method for measuring the affordability of an employer’s. coverage for § 4980H(b) purposes. Specifically, under this safe harbor, employer-provided coverage offered to an employee is affordable if the employee’s cost for self-only coverage under the plan does not exceed 9.5% of the federal poverty line for a single individual. The proposed affordability safe harbor would apply only for purposes of determining whether an employer is subject to the assessable payment under § 4980H(b). For example, the 6 26 CFR 54.9801-3(a)(3)(iii), 29 CFR 2590.701-3(a)(3)(iii), 45 CFR 146.111(a)(3)(iii). (This step is the second of five setups that we recommended in a recent post for ACA reporting readiness in Microsoft Dynamics GP .) An employer can use a different safe harbor for each plan but must apply the same safe harbor to all enrollees in a plan. There are three types of safe harbor contributions that can be made to a traditional safe harbor plan: A 3% safe harbor non-matching contribution. A basic safe harbor match of 100% up to 3% of compensation and 50% of the next 2% of compensation. There are three types of safe harbor contributions that can be made to a traditional safe harbor plan: A 3% safe harbor non-matching contribution. A basic safe harbor match of 100% up to 3% of compensation and 50% of the next 2% of compensation. An enhanced safe harbor match formula. A traditional safe harbor is a plan that is designed to pass the Actual Contribution Test without the need for numeric testing. There are three types of safe harbor contributions that can be made to a traditional safe harbor plan: A 3% safe harbor non-matching contribution. ACA compliance update: How to use three Safe Harbors. The Affordable Care Act requires that employers with full time equivalents of 50 or more offer insurance to their employees. Not just any insurance – affordable insurance. ACA compliance update: How to use three Safe Harbors. The Affordable Care Act requires that employers with full time equivalents of 50 or more offer insurance to their employees.
An employer can use a different safe harbor for each plan but must apply the same safe harbor to all enrollees in a plan.