Glossary of ACA Terms

10 Essential Health Benefits - The 10 essential health benefits include preventative care, emergency services, hospitalization, prescription drugs, mental health services, and pregnancy care. For children plans must also offer dental coverage and may provide other benefits.

1095A/B/C form - Form 1095-C is used to report information about each employee. These are forms provided to the IRS and taxpayers regarding their premium tax credit. These are provided each year. 1095 dash A is provided by the health insurance marketplace (HIM). 1095-B reports if you had minimal essential health coverage in the past year (this form is technically obsolete as it is not required to turn in with an individual tax return). 1095-C is provided by an employer which includes details for employer provided health care insurance.

“A” penalty - A penalty to an applicable large employer failing to offer minimum essential coverage to 95% of full time employees. (section 4980H ( a ) penalty). The amount of this penalty varies year to year for 2023 the penalty is $2880 per full time employee.

ACA audit - This is a step within the year end process which an employer is able to audit the 1095 forms. This audit usually looks for clerical errors within the forms data, cross referencing that data to ensure it meets the criteria for e-filing, and in addition looks at the code combination to determine whether penalty could be administered by the IRS based on the data provided. Through ad hoc edit the employer is able to research, edit, or accept the ACA audits outcome.

ACA deadlines - If paper filing February 28th of each year is the deadline. (this option is only available to applicable large employers filing less than 250 forms, it's anticipated that this threshold will be lowered to 10 forms for 2023 filing). Print and distribution of forms deadline is March 2nd of each year, this is after a permanent 30 day extension. Electronic filing to the IRS for ACA reporting is due March 31st of each year.

ACA filing year - This is the calendar year which you are reporting data for. Reporting is required by March 31st of each year for information on the year prior. For example the 2021 ACA reporting year will be submitted by March 31, 2022.

ACA indicator codes - These are codes used on the 1095 dash C form which explain an employees benefit eligibility and election for the month in which they worked. These codes are divided into two series: ACA indicator code 1 series, used for line 14 of the 1095C form, and ACA indicator code 2 series used for line 16 of the 1095C form.

Administrative period - A Period of time, chosen by the employer, which is between 0 and 90 days in length and immediately follows the Measurement Period, during which the employer can take actions, such as: determine average weekly hours worked during the Measurement Period, determine coverage eligibility, and begin enrollment for Full-Time employees.

Affordability - Ability to be afforded; The cost of something based upon amount of money in ones possession.

Affordable health care coverage - Affordable health care coverage is health coverage meeting the requirements of the Affordable Care Act usually providing minimal coverage that is affordable based upon these standards set into play by the IRS each year.

Age bandit plans - Health benefit plans in which the cost is calculated based upon the age of the recipient of that coverage

Aggregate employer - Aggregate Employer Contributions means the sum of all Company Contributions and Forfeitures allocated under this Plan for a Participant, and all employer contributions and forfeitures allocated for the Participant to all Related Defined Contributions in the Aggregation group.

Aggregated group indicator - Found within the 1094 form, the aggregated group indicator identifies all businesses (incorporated or not) under common control, which must be group together for purposes of determining ALE status. This usually happens with an owner having 20% or more ownership among those parties. Reference section 414 of the code or section 4001 of ERISA

AIRS program - Affordable Care acts information return. This is the program in which authorized e-file providers electronically submit data to the IRS. Providers must be authorized on an annual basis.

Applicable age - For an employee who is or will be eligible for an individual coverage HRA on the first day of the plan year, the employee’s applicable age for the plan year is the employee’s age on the first day of the plan year. For an employee who becomes eligible during the plan year, the employee’s applicable age for the remainder of the plan year is the employee’s age on the date the individual coverage HRA can first become effective for that employee. Note that for non-calendar year plans or for employees who become eligible during the plan year, the applicable age may not be the age reported in Part II of Form 1095-C.

Applicable location - An employee’s applicable location is where the employee resides for the calendar month, or if the ALE Member is applying the location safe harbor, the employee’s primary site of employment for the calendar month.

Applicable Large Employer- (ALE) an employer with an average of at least 50 full-time employees, including full-time equivalent employees, on average during the prior year.

Applicable lowest cost silver plan - Generally, the lowest cost silver plan for an employee for a calendar month is the lowest cost silver plan for self-only coverage of the employee offered through the Exchange for the ZIP code of the employee’s applicable location for the month. If there are different lowest cost silver plans in different parts of a rating area, an employee’s applicable lowest cost silver plan is the lowest cost silver plan in the part of the rating area in which the employee’s applicable location is located. The lowest cost silver plan for an employee is the lowest cost silver plan for the lowest age band in the individual market for the employee’s applicable location.

Attest/Attestation - When you apply for health coverage through the Marketplace, you're required to agree (or "attest") to the truth of the information provided by signing the application.

Benefit year - A year of benefits coverage under an individual health insurance plan. The benefit year for plans bought inside or outside the Marketplace begins January 1 of each year and ends December 31 of the same year. Your coverage ends December 31 even if your coverage started after January 1. Any changes to benefits or rates to a health insurance plan are made at the beginning of the calendar year.

Broker / Agent - An agent or broker is a person or business who can help you apply for help paying for coverage and enroll in a Qualified Health Plan (QHP) through the Marketplace. They can make specific recommendations about which plan you should enroll in. They're also licensed and regulated by states and typically get payments, or commissions, from health insurers for enrolling a consumer into an issuer's plans. Some brokers may only be able to sell plans from specific health insurers.

Breaks and service - An individual rehired after a break in service of less than 13 weeks is considered to be a continuing employee. An individual rehired after a break in service of at least 13 weeks is considered to be a new hire (26 weeks for educational organizations).

Broker of record - A broker of record is an agent responsible for managing and representing a policyholders insurance policy usually compensated by a monthly Commission.

Business advisor - A business advisor is a strategist working with all components of a company helping to plan, finance, market, and possibly develop.

CARES Act - Coronavirus Aid Relief, and Economic Security Act. The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a $2.2 trillion economic stimulus bill passed by the 116th U.S. Congress and signed into law by President Donald Trump on March 27, 2020, in response to the economic fallout of the COVID-19 pandemic in the United States

Census data - This is the employee's data including name, address, city, state, zip code, Social Security number, and dependent information.

Centers for Medicare & Medicaid Services (CMS) - The federal agency that runs the Medicare, Medicaid, and Children's Health Insurance Programs, and the federally facilitated Marketplace. For more information, visit cms.gov.

Certified public accountant (CPA) - A CPA, or certified public accountant, is a trusted financial adviser helping individuals, businesses, and other organizational entities plan and reach their financial goals. This usually involves keeping records of their books, ensuring compliance based upon client needs, and approval of all financial decisions.

Check end date - This is the date in which payroll checks were cut to employees

Child company - EIN's that are part of an aggregated group either a controlled group or consolidated group must have a parent company and the rest of the IN's are child companies. Any EIN within this aggregated group not designated as the parent is therefore a child company of that aggregated group

COBRA (Consolidated Omnibus Budget Reconciliation Act) - A federal law that may allow you to temporarily keep health coverage after your employment ends, you lose coverage as a dependent of the covered employee, or another qualifying event. If you elect COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage, you pay 100% of the premiums, including the share the employer used to pay, plus a small administrative fee.

COBRA continuation coverage - COBRA continuation coverage is health coverage that is required to be offered under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) in certain circumstances in which an employee or other individual covered under a health plan loses eligibility for coverage under that health plan (for example, because the employee terminates employment or has a reduction in hours). For purposes of these instructions, COBRA continuation coverage also includes coverage required under any other federal or state law that provides continuation coverage comparable to that provided under COBRA. For additional details, see section 4980B and Regulations sections 54.4980B-1 through 54.4980B-10

Common ownership - This is when an entity or group of entities have ownership or equity interest greater than 5% in another entity.

Company ID - This is the identification number given to a company that is entered into the solution. This number is unique to that company and subscription.

Compliance - The act of complying with the mandated regulations of an authoritative figure.

Consolidated Report - The Consolidated Report must include all employees of the company categorized by race, gender, and job category.

Control group - A control group exists when two or more entities are connected through common ownership from the parent company, a brother dash sister, or a combination of the two. A control group must be calculated as a whole in determining a ALE status and if the control group is determined to be an ALE it must abide by the employer mandate or be subject to "pay or play" penalties

Consolidated group - A consolidated group is a group of EIN's in which there is one parent company that request by writing it and all subsidiaries will form a consolidation, all EINs (subsidiaries) will now fall under the parents EIN. Example of this would be Facebook consolidating Instagram under its umbrella of companies.

Deductible - The amount you could owe during a covered. For your health benefits that you must cover before your plan begins to pay.

Defined contribution plan - The most popular example of defined contribution plan is a 401(k)

Defined–Benefit Plan - A defined-benefit plan is an employer-sponsored retirement plan where employee benefits are computed using a formula that considers several factors. The company is responsible for managing the plan’s investments and risk and will usually hire an outside investment manager to do this.

Department of Health and Human Services (HHS) - The federal agency that oversees CMS, which administers programs for protecting the health of all Americans, including Medicare, the Marketplace, Medicaid, and the Children’s Health Insurance Program (CHIP). For more information, visit hhs.gov.

Department of Labor - The United States Department of Labor is one of the executive departments of the U.S. federal government. It is responsible for the administration of federal laws governing occupational safety and health, wage and hour standards, unemployment benefits, reemployment services, and occasionally, economic statistics.

Department of Treasury - The Department of the Treasury is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and the U.S. Mint.

Dependent Care Flexible Spending Account (FSA) - Dependent care flexible spending accounts let employees use tax-exempt funds to pay for childcare expenses they incur while at work. Employees can also use FSAs to cover care expenses for qualifying dependent adults who live in their homes, including spouses and parents. Parents and guardians can save a significant amount of money when they use an FSA, rather than after-tax dollars, to pay for dependent care expenses.

Dependent Coverage - Insurance coverage for family members of the policyholder, such as spouses, children, or partners.

Designated Governmental Entity (DGE) - A DGE is a person or persons that are part of or related to the Governmental Unit that is the ALE Member and that is appropriately designated for purposes of these reporting requirements. For a Governmental Unit that has delegated some or all of its reporting responsibilities to a DGE for some or all of its employees, one Authoritative Transmittal must still be filed for that Governmental Unit reporting aggregate employer-level data for all employees of the Governmental Unit (including those for whom the Governmental Unit has delegated its reporting responsibilities). For more information, see Authoritative Transmittal for Employers Filing Multiple Forms 1094C, earlier.

Election data - data needed for the offer of coverage template. See offers of coverage.

Electronic delivery - This is a step within the year end process where an employer is able to electronically deliver 1095C form to their employees electronically, this can only happen after consent from employee for electronic delivery of the form.

Election outcome - The outcome chosen by an employee from the offer of health benefits from their employer. This could be waived or elected.

Electronic filing (e-file) - This is a step within the year end process where the employer is able to electronically file their ACA 1095 and 1094 forms to the IRS as well as individual states if applicable

Eligibility - The outcome of calculations meets the requirements needed, or is in the parameters required, allow one to be approved for a service.

Employees - A person that is employed for wages or salary.

Employers - A person or organization that employs people

Employee Benefits Security Administration - The Employee Benefits Security Administration is a unit of the Department of Labor (DOL) which oversees and administers ERISA.

Employee Required Contribution - The Employee Required Contribution is the employee’s share of the monthly cost for the lowest-cost, self-only minimum essential coverage providing minimum value that is offered to the employee by the ALE Member. The employee share is the portion of the monthly cost that would be paid by the employee for self-only coverage, whether paid through salary reduction or otherwise. For purposes of determining the amount of the employee’s share of the monthly cost, an ALE Member may divide the total cost to the employee for the plan year by the number of months in the plan year. This monthly amount of the employee’s share of the cost would then be reported for any months of that plan year that fall within the 2022 calendar year. For example, if the plan year begins January 1, the ALE Member may determine the amount to report for each month by taking the total annual employee cost for all 12 months and dividing by 12. If the plan year begins April 1, the ALE Member may determine the amount to report for January through March 2022, by taking the total annual employee cost for the plan year ending March 31, 2022, and dividing by 12 (and reporting that amount for January, February, and March 2022). Then, the ALE Member may determine the monthly amount for April through December 2022 by taking the total annual employee cost for the plan year ending March 31, 2022, and dividing by 12 (and reporting that amount for April through December 2022). The Employee Required Contribution may not be the amount the employee paid for coverage. For additional rules on determining the amount of the Employee Required Contribution, including for cases in which an ALE Member makes available certain HRA contributions, cafeteria plan contributions, wellness program incentives, and opt-out payments, see Regulations sections 1.5000A-3(e)(3)(ii) and 1.36B-2(c)(3)(v)(A). Also see Notice 2015-87. Special rules apply for individual coverage HRAs. Generally, the Employee Required Contribution for the individual coverage HRA means the required HRA contribution, as defined in Regulations section 1.36B-2(c)(5)(ii). However, for purposes of the individual coverage HRA safe harbors in Proposed Regulations section 54.4980H-5(f), the required contribution is determined based on the applicable lowest cost silver plan, as defined in Proposed Regulations 54.4980H-5(f)(7)(iii), and the monthly premium for the applicable lowest cost silver plan is determined based on the employee’s age, as defined in Proposed Regulations 54.4980H(f)(7)(i), and the employee’s applicable location, as defined in Proposed Regulations 54.4980H(f)(7)(ii). For an employee offered an individual coverage HRA, the Employee Required Contribution is the excess of the monthly premium for the applicable lowest cost silver plan based on the employee’s applicable age over the monthly individual coverage HRA amount (generally, the annual individual coverage HRA amount divided by 12)

Employee status - In regards to the ACA this is the status of employment based on an employee's hours worked, indicating whether or not they work on average over 30 hours per week or 130 hours per month

Employer Identification Number (EIN) - An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN.

Employer mandate - This mandate from the ACA requires employers to offer health care insurance that is affordable and provides minimal value to at least 95% of their full-time employees and children up to the end of the month in which they turn 26. employers may be subject to penalty for not completing the requirements mandated.

Employer or union retiree plans - Plans that provide health and/or drug coverage to former employees or members, and, in some cases, their families. These plans are offered to people through their (or a spouse's) former employer or employee organization. Many of these plans aren't legally required to meet many of the provisions of the Affordable Care Act, including providing coverage for children up to age 26.

ERISA - ERISA is the Employee Retirement Income Security Act of 1974. It is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

Essential Health Benefits - The 10 essential health benefits include preventative care, emergency services, hospitalization, prescription drugs, mental health services, and pregnancy care. For children plans must also offer dental coverage and may provide other benefits.

Establishment Report - A separate EEO-1 Type 4 report must be submitted for each physical establishment with 50 or more employees. Employment data must be categorized by race, gender, and job category.

Exemption Certificate Number (ECN) - A number the Marketplace provides when you qualify for a health insurance exemption.

Extension - This is the process in which a deadline will not be met therefore a request to extend that deadline is needed and the extension is granted normally no more than 30 days from the original deadline.

Families First Coronavirus Response Act - The second phase was an approximately $104 billion package largely focused on paid sick leave and unemployment benefits for workers and families (the Families First Coronavirus Response Act), which was enacted on March 18, 2020.

Family Medical Leave Act (FMLA) - Family Medical Leave Act: A federal law that guarantees up to 12 weeks of job protected leave for certain employees when they need to take time off due to serious illness or disability, to have or adopt a child, or to care for another family member. When on leave under FMLA, you can continue coverage under your job-based plan.

Federal Poverty Level - This is a measurement of income completed by the Department of Health and Human Services(HHS) which is conducted every year. The federal poverty level is used to determine eligibility for government, state, and other assisted programs. This report is provided annually for individuals and those having up to 9 plus family members.

Federally Qualified Health Center (FQHC) - Federally funded nonprofit health centers or clinics that serve medically underserved areas and populations. Federally qualified health centers provide primary care services regardless of your ability to pay. Services are provided on a sliding scale fee based on your ability to pay.

Flexible Spending Account (FSA) - An FSA is sometimes called a “flexible spending arrangement”.

Flexible Spending Accounts or flexible spending arrangement (FSAs) - A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. You don't pay taxes on this money. This means you'll save an amount equal to the taxes you would have paid on the money you set aside.

Form 1094-A - Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. These forms are a cover sheet provided by the health care provider for the B series or the employer for the C series.

Form 1094-B - Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. These forms are a cover sheet provided by the health care provider for the B series or the employer for the C series.

Form 1094-C - Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. These forms are a cover sheet provided by the health care provider for the B series or the employer for the C series.

Form 1094-C - Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. These forms are a cover sheet provided by the health care provider for the B series or the employer for the C series.

Form 1094-C - Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. These forms are a cover sheet provided by the health care provider for the B series or the employer for the C series.

Form 1094-C - Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. These forms are a cover sheet provided by the health care provider for the B series or the employer for the C series.

Fully-Insured Health Plan - is the traditional model of structuring an employer-sponsored health plan and is the most familiar option to employees

Full time employee - An employee who works an average of at least 30 hours per week, or 130 or more hours in a calendar month (so Non-Full-Time would be less than 30 hours per week)

Full time equivalent - Any non-full-time employee whose hours have been measured totaling 30 or more hours per week, or 130 or more hours per month, is considered to be full time equivalent.

Good Faith Relief - Provides that employers that report incomplete or incorrect information on their information returns (including missing and inaccurate taxpayer identification numbers or “TINs”) can show they made a good- faith effort to file and furnish. In determining whether Good-Faith Relief applies, the IRS will take into account whether an employer made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data or testing its ability to transmit information to the IRS.  The 2020 reporting year was the final year this type of relief was available. Notice 2020-76 conveys this plainly: “As this good-faith relief was intended to be transitional relief, this is the last year the Treasury Department and the IRS intend to provide this relief.”

Headquarters Report - The Headquarters Report must include employees working at a separate EEO-1 report for the headquarters establishment is required even if there are fewer than 50 employees working at that location.

Health care workforce incentive - The use of incentives and recruiting to encourage people to enter into health care professions like primary care and to encourage providers to practice in underserved areas

Health insurance agent and broker - A trained insurance professional who can help you enroll in a health insurance plan. Agents may work for a single health insurance company; brokers may represent several companies. You won’t pay anything additional if you enroll with an agent or broker.

Health Insurance Marketplace - The Health Insurance Marketplace is a resource where individuals, families, and small businesses can compare health insurance plans for coverage and affordability; get answers to questions about your health care insurance; find out if you are eligible for tax credits for private insurance or health programs like Medicaid or the Children’s Health Insurance Program (CHIP); enroll in a health insurance plan that meets your needs.

Health Insurance Portability and Accountability Act of 1996 (HIPAA) - The total amount you may have to pay for health plan coverage, which is estimated before you actually have the coverage and have health expenses under the coverage. Generally, your total cost is your premium + deductible + out-of-pocket costs + any copayments/coinsurance.

Health Maintenance Organization - An individual who needs to secure health insurance may find a variety of health insurance providers with unique features. One type of insurance provider that is popular in the health insurance marketplace is a Health Maintenance Organization (HMO), an insurance structure that provides coverage through a network of physicians.

Health Reimbursement Arrangement (HRA) - Health Reimbursement Arrangements (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the arrangement. Health Reimbursement Arrangements are sometimes called Health Reimbursement Accounts.

Health Savings Account (HSA) - A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.

High deductible health plan (HDHP) - A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more health care costs yourself before the insurance company starts to pay its share (your deductible). A high deductible plan (HDHP) can be combined with a health savings account (HSA), allowing you to pay for certain medical expenses with money free from federal taxes.

HIPAA eligible individual - Your status once you have had 18 months of continuous creditable health coverage. To be HIPAA (Health Insurance Portability and Accountability Act) eligible, at least the last day of your creditable coverage must have been under a group health plan; you also must have used up any COBRA or state continuation coverage; you must not be eligible for Medicare or Medicaid; you must not have other health insurance; and you must apply for individual health insurance within 63 days of losing your prior creditable coverage. When you're buying individual health insurance, HIPAA eligibility gives you greater protections than you would otherwise have under state law.

Hours of service - An hour of service is each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer, and each hour for which an employee is paid, or entitled to payment, for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence. An hour of service does not include any hour of service performed as a bona fide volunteer of a government entity or tax-exempt entity, as part of a Federal Work-Study Program (or a substantially similar program of a state or political subdivision thereof) or to the extent the compensation for services performed constitutes income from sources outside the United States. For additional rules for determining hours of service, see Regulations sections 54.4980H-1(a)(24) and 54.4980H-3(b), and Notice 2015-87, Q&A 14, at IRS.gov/irb/2015-52_IRB/ ar11.html. See section VI of the preamble to the section 4980H regulations for a discussion of determination of hours of service for categories of employees for whom the general rules for determining hours of service may present special difficulties (including adjunct faculty and commissioned salespeople) and certain categories of work hours associated with some positions of employment, including layover hours (for example, for certain airline employees), on-call hours, and work performed by an individual who is subject to a vow of poverty as a member of a religious order.

ICHRA plans - Individual coverage HRA. Applicable large employers are allowed to offer is Chr a plans to their employees which comply with the employer mandate. This allows individuals to select a plan benefiting them utilizing tax free allowances provided by their employer. Employers may offer this in addition to their traditional health plans which allows them to meet the employer mandate requirements and at the same time benefiting individuals to select exactly what they need.

Individual Coverage Health Reimbursement Arrangement (ICHRA) - A type of Health Reimbursement Arrangement that reimburses medical expenses, like monthly premiums, and requires eligible employees and dependents to have individual health insurance coverage or Medicare Parts A (Hospital Insurance) and B (Medical Insurance) or Part C (Medicare Advantage) for each month they are covered by the individual coverage HRA.

Individual health insurance policy - Policies for people that aren't connected to job-based coverage. Individual health insurance policies are regulated under state law.

Individual penalty - A payment ("fee," "fine," "individual mandate") you made when you filed taxes if you didn't have health insurance that counted as qualifying health coverage for plan years 2018 and earlier. The fee for not having health insurance no longer applies. This means you no longer pay a tax penalty for not having health coverage.

Initial measurement - This is the period of time in which an employee's hours are measured for the very first time. This. Usually starts at the date of hire and last for the specify time determined by the employer, this time must be the same for all employees.

Indicator code matrix - This is a widget that allows end users to enter the combination of codes applicable to the 1095C form lines 14 and 16, and see a summary of what that combination means.

IRS Penalty - Any person or company that is registered with the IRS is obligated to meet their tax obligations, if these obligations are not met an IRS penalty will be enforced by the IRS for various reasons. These penalties are presented through various IRS penalty letters.

IRS penalty letter - A letter issued by the IRS due to failure in meeting tax obligations. Reasons may include failure to file on time, paying the taxes owed incorrectly, preparing returns inaccurately, providing inaccurate information on your return, failure to meet calculations mandated by the IRS, and a variety of other reasons. These letters are issued for various reasons including but not limited to: information return, failure to file, failure to pay, accuracy of information, erroneous claims, incorrect calculations on return, failure to meet mandated requirements.

IRS penalty letter deadlines - IRS penalty letters provide deadlines within the body of the letter. These deadlines vary based upon the type of letter administered by the IRS. In general for ACA penalties such as the 226-J letter, a 30 day. Is provided for response and action. Check the IRS gov.com page for specifics.

Large group health plan - In general, a group health plan that covers employees of an employer that has 51 or more employees. In some states large groups are defined as 101 or more.

Late fees - Fees administered due to submissions completed after the deadline date

Letter 227 (J-N) -  ESRP Acknowledgement Letters provide a receipt of your response and options for the next steps from the IRS.   

Letter 227-J - acknowledges receipt of the signed agreement form and informs the employer that the ESRP will remain and the case will be closed; consequently, no response is required.

Letter 227-K - acknowledges receipt and acceptance of the employer’s response, confirms that the proposed ESRP has been reduced to zero, and indicates the case will be closed; therefore, no need to respond

Letter 227-L - acknowledges receipt and partial acceptance of the employer’s response, confirms that the proposed ESRP has been reduced, and provides an updated form 14765, allowing the employer to agree, disagree, or request an appeal.

Letter 227-M - acknowledges receipt of the employer’s response, confirms that the proposed ESRP will remain unchanged, and provides form 14765, allowing the employer to agree, disagree, or request an appeal. 

Letter 227-N - acknowledges the decision of the Independent Office of Appeals and provides an updated ESRP amount to the employer.  This letter is final, and no response is required. 

Letter 5699 - Letter 5699, Is issued to inform an Applicable Large Employers (ALE) for the Missing Information on Return Form 1094/1095-C for not being compliant with the ACA Reporting under section 6056 . The IRS is using this letter to make initial contact with an organization that the IRS believes may have been an Applicable Large Employers (ALE), and therefore required to file information returns under the Affordable Care Act (ACA). IRS identifies the noncompliant ALEs based on their W-2 forms reported for the calendar year.

Letter 5698 -  It is issued when there is no response to Letter 5699 within the allotted time. Without a response to Letter 5698, the IRS pursues Failure to File and Failure to Furnish penalties.

Letter 5005-A -  The Information Return Penalty Cover Letter is issued once a case has been examined and assessed a penalty for failing to distribute or file their ACA forms. Accompanying Letter 5005-A will be Form 886-A which explains items reviewed and penalized to inform the employer of the facts, law, and conclusion of their decision.  

Letter 5840 -  The Information Return Closing Letter, which all employers hope to receive, states that their response was sufficient, no more action is required, and the case is closed. 

Letter 6145 -  Employer Shared Responsibility Payment (ESRP) Additional Information Letter confirms receipt and review of the employer’s response but concludes that the penalty still applies.

Letter 5040-J -  The Follow Up Letter is issued when there is no response from the employer to Letter 226-J. There is a fifteen-day response deadline for Letter 5040-J. 

Limited Non-Assessment Period - A Limited Non-Assessment Period generally refers to a period during which an ALE Member will not be subject to an assessable payment under section 4980H(a) and, in certain cases section 4980H(b), for a full-time employee, regardless of whether that employee is offered health coverage during that period. The first five periods described below are Limited Non-Assessment Periods with respect to sections 4980H(a) and 4980H(b) only if the employee is offered health coverage by the first day of the first month following the end of the period. Also, the first five periods described below are Limited Non-Assessment Periods for section 4980H(b) only if the health coverage that is offered at the end of the period provides minimum value. For more information on Limited Non-Assessment Periods and the application of section 4980H, see Regulations section 54.4980H-1(a)(26). • First year as ALE period. January through March of the first calendar year in which an employer is an ALE, but only for an employee who was not offered health coverage by the employer at any point during the prior calendar year. • Waiting period under the monthly measurement method. If an ALE Member is using the monthly measurement method to determine whether an employee is a full-time employee, the period beginning with the first full calendar month in which the employee is first otherwise (but for completion of the waiting period) eligible for an offer of health coverage and ending no later than 2 full calendar months after the end of that first calendar month. • Waiting period under the look-back measurement method. If an ALE Member is using the look-back measurement method to determine whether an employee is a full-time employee and the employee is reasonably expected to be a full-time employee at his or her start date, the period beginning on the employee’s start date and ending not later than the end of the employee’s third full calendar month of employment. • Initial measurement period and associated administrative period under the look-back measurement method. If an ALE Member is using the look-back measurement method to determine whether a new employee is a full-time employee, and the employee is a variable hour employee, seasonal employee, or part-time employee, the initial measurement period for that employee and the administrative period immediately following the end of that initial measurement period. • Period following change in status that occurs during initial measurement period under the look-back measurement method. DRAFT AS OF October 6, 2022 Individual coverage HRA. An HRA is a type of account-based health plan that employers can use to reimburse employees for their medical care expenses. An individual coverage HRA is an HRA integrated with individual health insurance coverage or Medicare, subject to certain conditions. For more information about individual coverage HRAs, see T.D. 9867 and IRS.gov/ Newsroom/Health-Reimbursement-Arrangements-HRAs. Limited Non-Assessment Period. A Limited Non-Assessment Period generally refers to a period during which an ALE Member will not be subject to an assessable payment under section 4980H(a) and, in certain cases section 4980H(b), for a full-time employee, regardless of whether that employee is offered health coverage during that period. The first five periods described below are Limited Non-Assessment Periods with respect to sections 4980H(a) and 4980H(b) only if the employee is offered health coverage by the first day of the first month following the end of the period. Also, the first five periods described below are Limited Non-Assessment Periods for section 4980H(b) only if the health coverage that is offered at the end of the period provides minimum value. For more information on Limited Non-Assessment Periods and the application of section 4980H, see Regulations section 54.4980H-1(a)(26). • First year as ALE period. January through March of the first calendar year in which an employer is an ALE, but only for an employee who was not offered health coverage by the employer at any point during the prior calendar year. • Waiting period under the monthly measurement method. If an ALE Member is using the monthly measurement method to determine whether an employee is a full-time employee, the period beginning with the first full calendar month in which the employee is first otherwise (but for completion of the waiting period) eligible for an offer of health coverage and ending no later than 2 full calendar months after the end of that first calendar month. • Waiting period under the look-back measurement method. If an ALE Member is using the look-back measurement method to determine whether an employee is a full-time employee and the employee is reasonably expected to be a full-time employee at his or her start date, the period beginning on the employee’s start date and ending not later than the end of the employee’s third full calendar month of employment. • Initial measurement period and associated administrative period under the look-back measurement method. If an ALE Member is using the look-back measurement method to If an ALE Member is using the look-back measurement method to determine whether a new employee is a full-time employee, and, as of the employee’s start date, the employee is a variable hour employee, seasonal employee, or part-time employee, but, during the initial measurement period, the employee has a change in employment status such that, if the employee had begun employment in the new position or status, the employee would have reasonably been expected to be a full-time employee, the period beginning on the date of the employee’s change in employment status and ending not later than the end of the third full calendar month following the change in employment status. If the employee is a full-time employee based on the initial measurement period and the associated stability period starts sooner than the end of the third full calendar month following the change in employment status, this Limited Non-Assessment Period ends on the day before the first day of that associated stability period. • First calendar month of employment. If the employee’s first day of employment is a day other than the first day of the calendar month, then the employee’s first calendar month of employment is a Limited Non-Assessment Period.

Look back methodology - This measurement approach determines an employee's full-time status by tracking the employees hours over a set period of time and then calculating the average number of hours worked over that period.

March 23, 2010 - Date that Patient Protection and Affordable Care Act was signed into law by President Obama

Marketplace -   "Health Insurance Marketplace" AKA the "exchange" a website, healthcare.gov, run by the federal government to supply shopping and enrollment services for medical insurance created by the Affordable Care Act of 2010

Measurement - The conducting of calculations based upon specific criteria or parameters, in regards to the ACA these are calculations based upon the annual requirements of the IRS.

Measurement Period - A Period of time, chosen by the employer, that is between 3 and 12 months in length during which the employer will keep track of the average weekly hours worked by their Ongoing Salary, Ongoing Hourly and New Variable Hour Employees.

Medicare - Medicare is insurance provided by the federal government for people over the age of 65 and the disabled

Medicare Advantage (Medicare Part C) - A type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you're enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and aren't paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.

Minimal essential coverage offer indicator - On form 1094c, section III(a),This is the check box which indicates that MEC, as defined by the ACA, was offered that month. The employer must have offered minimal essential coverage (MEC) under an eligible employer-sponsored plan to at least 95% of full-time employees and their dependents.

Modified Adjusted Gross Income (MAGI) - The figure used to determine eligibility for premium tax credits and other savings for Marketplace health insurance plans and for Medicaid and the Children's Health Insurance Program (CHIP). MAGI is adjusted gross income (AGI) plus these, if any: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest.

Monthly measurement - This is a measurement of hours worked to determine full time status on a monthly frequency.

Multiemployer plan - A multi employer plan is a plan that is maintained and collectively bargained by more than one employer, usually within the same region or industry or labor union, and sometimes referred to as associated groups. LABI would be a version of this.

Multi-establishment company - A multi-establishment company does business at two or more physical addresses.

Multiple investment options - While some plan sponsors take matters into their hands and handle all the investment decisions for retirement plans, most of them outsource the fiduciary management of the assets in the plan to one or more third parties. This way, multiple investment options run by different money managers may be offered to suit various risk profiles among the company’s employees.

New Variable Hour Employee - An employee who cannot be determined on the employee’s start date whether they are reasonably expected to work an average of at least 30 hours per week during the initial measurement period (based on the facts and circumstances on the employee’s start date).

North American Industry Classification System (NAICS) - The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.

Not yet accredited (health plan) - A plan that hasn't been given a "seal of approval" by an independent company to show it meets national quality standards for health plans. There are many reasons why a health plan may not be accredited. For example, some plans have never gone through the accreditation process or have gone through the process with a different accrediting organization. Other plans are too new to be accredited or have started but not finished the accreditation process. Not being accredited doesn't mean that a plan is lower quality than a plan that's accredited.

Obamacare - Obamacare is a set of laws governing people's access to health insurance.

Offers of coverage - This is the data detailing the plan offer date and the outcome of offer with the specific dates of waived or election, as well as disenrollment date if applicable for employees.

Ongoing Employee - An employee that has been employed for the length of at least one full Measurement Period (as chosen by the employer).

Open enrollment - This time frame usually parallels the administrative. In which an employer offers coverage and provides a set time frame for the employee to make a decision on the outcome of the health coverage offered

Paper filing - This is a step not supported by sync streams solution, in which an applicable large employer filing less than 250 forms is able to print those forms and submit to the IRS through USPS their paper filing. Note this due date is February 28th of each year and it is anticipated that the threshold of form count will be lowered to 10 or less for the 2023 filing year.

Parent company - EIN's that are part of an aggregated group either a controlled group or consolidated group must have a parent company within the solution. This is the selected EIN of that group which will be the authoritative transmitter for the group's 1094 form.

Part time employee - An employee hired for a position that worked less than 30 hours per week, or 130 hours in a calendar month (this would be a Non-Full-Time employee)

Pay or Play - This provision is also referred to as "pay or play," because ALEs potentially pay a penalty if they do not offer coverage that meets ACA requirements and one or more full-time employees obtain subsidized coverage through a health care Marketplace (also referred to as an Exchange).

Paycheck Protection Program - Creates $669 billion small-business loan program called the Paycheck Protection Program. Originally $349 billion, the Paycheck Protection Program and Healthcare Enhancement Act added $320 billion.

Payroll data - This is the employees pay data usually provided with each payroll run and designated by a check ending date, or payroll end date

Pension - Also Know as a Retirement benefit.  A payment or series of payments made to you after you retire from work. Generally, the amount of your income from a pension or retirement account distribution depends on the type of pension or retirement account, how much you contributed to the pension or retirement account, and whether you were already taxed on the amounts you contributed. A qualified distribution from a designated Roth account isn't required to be included in your income.

Pension Benefit Guaranty Corporation - The Pension Benefit Guaranty Corporation (PBGC) is a United States federally chartered corporation created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at the lowest level necessary to carry out its operations

Percentage based plans - Health benefit plans in which the cost is calculated based upon sum of a set percentage of the recipient monthly wage.

Plan - A benefit your employer, union or other group sponsor provides to you to pay for your health care services.

Plan data - this is the information provided on the summary page for health benefit plans. This includes the benefit plan name, start and end dates of the plan, tears of coverage for the plan, plan cost, employee only cost per month, self funded or fully insured.

Plan sponsor - A plan sponsor is a designated party –usually a company or employer – that sets up a healthcare or retirement plan, such as a 401(k), for the benefit of the organization’s employees.

Plan year - A 12-month period of benefits coverage under a group health plan. This 12-month period may not be the same as the calendar year. To find out when your plan year begins, you can check your plan documents or ask your employer. (Note: For individual health insurance policies this 12-month period is called a “policy year”).

Point of Service (POS) Plans - A type of plan in which you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans also require you to get a referral from your primary care doctor in order to see a specialist.

Policy year - A 12-month period of benefits coverage under an individual health insurance plan. This 12-month period may not be the same as the calendar year. To find out when your policy year begins, you can check your policy documents or contact your insurer. (Note: In group health plans, this 12-month period is called a “plan year”).

Population of forms - The action of filling out the necessary data required for an official form.

Pre-existing Condition Insurance Plan (PCIP) - A program (that no longer exists) created by the Affordable Care Act to provide a health coverage option if you were uninsured for at least 6 months, had a pre-existing condition, and were denied coverage (or offered insurance without coverage of the pre-existing condition) by a private insurance company.

Preview forms - This is the step within the year end process which an employer is able to preview their 1095C forms making any corrections necessary at that time

Print and mail distribution - Under the employer shared responsibility mandate the printing and distribution of forms to employees must now be completed by March 2nd of each year. Electronic distribution is allowed only if the employer has consent from employee prior to distribution.

Print forms - This is the step within the year end process which an employer is able to print their 1095C forms automatically sending them to the employer via United States Postal Service.

Qualified plans - Qualified Plans are ERISA Requirements Plans covered under ERISA

Qualified Retirement Plan - A Qualified Retirement Plan meets the requirements of Internal Revenue Code Section 401(a) of the Internal Revenue Service (IRS) and is thus eligible to receive certain tax benefits. An employer establishes such retirement plan on behalf of and for the benefit of the company’s employees. It is one tool that can help employers attract and retain good employees.

Qualified Retirement Plan and Investing - Qualified plans only allow certain types of investments, which vary by plan but typically include publicly traded securities, real estate, mutual funds and money market funds. 

Qualified retirement plan and taxes - Qualified retirement plans gives employers a tax break for the contributions they make for their employees. Those plans that allow employees to defer a portion of their salaries into the plan can also reduce employee’s present income-tax liability by reducing taxable income.

Rate of Pay Safe Harbor - This is a method of providing ACA affordability which uses the employee's hourly rate or monthly salary rate to determine ACA Affordability. Formula: Take the lowest hourly rate of an employee that month multiplied by (percentage given by government annually for ACA affordability multiplied by 130 hours).

Retirement benefit - Also, know as a pension. A payment or series of payments made to you after you retire from work. Generally, the amount of your income from a pension or retirement account distribution depends on the type of pension or retirement account, how much you contributed to the pension or retirement account, and whether you were already taxed on the amounts you contributed. A qualified distribution from a designated Roth account isn't required to be included in your income.

Reconciliation - The process in which an invoice is reconciled against work completed and the balance is then settled.

Referral - This is a contract between the software provider and third party where the third party refers clients to the software and in return receives a referral fee dictated within the contract. Software provider completes all transactions with end user and provides first level support.

Regulations - The directives or rules created and enforced by an authority

Reseller - This is a contracted partner which resells approved product, as well as provides first and second level support to end user. Pricing is usually discounted for the reseller so that they may price the product for profit to their clients. Guidelines are stipulated within the contract between reseller and software provider.

Seasonal employee - An employee hired for a position that worked during a specific season of the year (this would be a Non-Full-Time employee). Also know as seasonal worker

Seasonal worker  - An employee hired for a position that worked during a specific season of the year (this would be a Non-Full-Time employee).  Also know as seasonal employee

Self-Insured Plans - are funded and managed by an employer, often to reduce health insurance costs.

Single-establishment company - A single-establishment company does business at only one physical address. A single-establishment company is required to submit only one EEO-1 data report -- a Type 1 EEO-1 Report.

Small employer - A small employer has been 2-50: an employer and one employee (2) to no more than 50 employees (including the employer, if on the plan). The ACA changed this definition to no more than 100 employees (but allowing a state to delay the change until plan year 2016).

Special Enrollment Period (SEP) - A time outside the yearly Open Enrollment Period when you can sign up for health insurance. You qualify for a Special Enrollment Period if you've had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child, or if your household income is below a certain amount.

Stability period - The Stability Period begins at the end of the Measurement Period (and any Administrative Period, if the employer elects to have one). The look-forward period for which an employee’s status (Calculated and determined during the Measurement Period as Full-Time or Non-Full-Time) is locked in, regardless of the employee’s actual hours during this Stability Period (provided that the employee continues to be an employee during this Period). The length of the Stability Period will be dictated by the length of the Measurement Period (chosen by the employer). The Stability Period will be the longer of: 6 months or the length of the Measurement Period chosen by the employer.

Staffing agency - A business that specifies in the hiring placement of individuals. This could be temporary work or permanent placement depending on the staffing agency and its clients' needs.

State Health Insurance Assistance Program - Also, known as SHIP. A state program that gets funding from the federal government to provide free local health coverage counseling to people with Medicare.

Standard Industrial Classification (SIC) system - Prior to 1997 this was the system used to classify business and was replaced by NAICS

Statute of limitations - The Internal Revenue Service (IRS) recently concluded that there is no statute of limitations that applies for pay or play penalties owed by an applicable large employer (ALE). This means that there is no time limit for the IRS to assess penalties on employers that do not comply with the employer shared responsibility rules (aka “pay or play”) for a given year. Rather, the IRS could assess such penalties many years after the violation occurred.

Submission - The action of presenting or providing documents that have been requested from an authority or another party.

Subsidized coverage - Health coverage available at reduced or no cost for people with incomes below certain levels.Examples of subsidized coverage include Medicaid and the Children’s Health Insurance Program (CHIP). Marketplace insurance plans with premium tax credits are sometimes known as subsidized coverage too.In states that have expanded Medicaid coverage, your household income must be below 138% of the federal poverty level (FPL) to qualify.In all states, your household income must be between 100% and 400% FPL to qualify for a premium tax credit that can lower your insurance costs.If your income is at or below 150% FPL, you may qualify to enroll in or change Marketplace coverage through a Special Enrollment Period.If your income is above 400% FPL, you may still qualify for savings on a 2022 Marketplace health insurance plan.

Summary of Benefits and Coverage (SBC) - Employers must provide employees with a standard "Summary of Benefits and Coverage" (SBC) form explaining what their health plan covers and what it costs. The purpose of the SBC is to help employees understand their health insurance options. You could face a penalty for non-compliance An easy-to-read summary that lets you make apples-to-apples comparisons of costs and coverage between health plans. You can compare options based on price, benefits, and other features that may be important to you. You'll get the "Summary of Benefits and Coverage" (SBC) when you shop for coverage on your own or through your job, renew or change coverage, or request an SBC from the health insurance company.

Tax credits - Provides a refundable employee retention tax credit for employers whose operations were suspended due to covid-19 or whose revenue has significantly decreased due to covid-19. The tax credit is equal to 50% of qualified wages paid between March 13, 2020, and December 31, 2020. Maximum credit is $5,000 per employee. Qualified wages include the cost of qualified health care. 

Tax filing requirement - The minimum amount (or threshold) of income requiring you to file a federal tax return. 2021 filing requirements for most taxpayers: Gross income of at least $12,550 (individuals) or $25,100 (married filing jointly). Different thresholds apply for dependents, people 65 and older, and those who use other tax filing statuses (like married filing separately).

Tax filing requirement (for dependents) - The minimum income requiring a dependent to file a federal tax return. 2021 filing requirements for dependents under 65: Earned income of at least $12,550, or unearned income (like from investments or trusts) of at least $1,100. You must include on your Marketplace application income for any dependent required to file.

The marketplace - "Health Insurance Marketplace" AKA the "exchange" a website , healthcare.gov, run by the federal government to supply shopping and enrollment services for medical insurance created by the Affordable Care Act of 2010.

The Patient Protection and Affordable Care Act - This is the comprehensive title for the current health care reform law enacted March 23rd 2010. The Patient Protection usually describes the first part of the comprehensive reform, and the“ Affordable Care Act” usually refers to the final, amended version of the law. In its entirety the this law provides rights and protections that make affordable valued health care coverage accessible and expands Medicaid program to cover low income individuals / households.

The Small Business Health Options Program (SHOP) - The Small Business Health Options Program (SHOP) is for small employers who want to provide health and/or dental insurance to their employees — affordably, flexibly, and conveniently.

The Social Security Number Verification Service - https://www.ssa.gov/employer/ssnv.htm For more detailed instructions on registering and/or using SSNVS, see the Social Security Number Verification Service Handbook.

Third Party Administrator (TPA) - A "Third party administrator" provides operational services or processing to a business or entity, usually under contract.

Total cost estimate (for health coverage) - The total amount you may have to pay for health plan coverage, which is estimated before you actually have the coverage and have health expenses under the coverage.

Variable hour employee - This is an employee that does not have a set number of hours each week and for the ACA would be considered a part time employee, therefore requiring tracking calculations for full time equivalent status.

Violation of participation or contribution rates - In the case of a group health plan, the plan sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules, pursuant to applicable State law.

W-2 - Wage and tax statement provided to employee from employer annually. Information on this form is used for various things including individual tax returns.

W-2 Safe Harbor - This is a method of providing ACA affordability which uses W2, box 1 wages. Formula: W2 box 1 wages multiplied by (percentage given by government annually for ACA affordability). There may be an adjustment for partial year coverage

Waiting period - The time that must pass before coverage can become effective for an employee or dependent who is otherwise eligible for coverage under a job-based health plan.

Year end process - This is the process of steps needed to take place in a strategic order so that the requirements of print, distribution, and filing may take place with little to no error

Zip code - Health benefit plans in which the cost is calculated based upon the recipients residential zip code