Understanding ACA Safe Harbor Codes and Safe Harbor Relief Groups

PeopleSoft HR Manage Base Benefits delivers ACA Safe Harbor Codes (from Code Series 2 — Section 4980H Safe Harbor Codes and Other Relief for Employers) which provide the IRS with information used to administer the employer shared responsibility provisions of the Affordable Care Act. There are nine Safe Harbor codes (2A – 2I); four of these codes (2E, 2F, 2G, and 2H) are classified as Safe Harbor Relief Groups. The Safe Harbor Relief Groups component enables the employer to identify the employee population that belongs to each of the code 2E, 2F, 2G, and 2H groups on a monthly basis.

The following terminology may be of use to understand ACA Safe Harbors and Safe Harbor Relief Groups:

• Employer Shared Responsibility: Employers with 50 or more employees are required to provide health benefits to full-time (30 or more hours per week) employees or pay a penalty per employee, depending on the situation.

• ACA Full-time: An employee defined as working, or hired and expected to work at least 30 hours per week or 130 hours per month. (52 weeks x 30 hours)/12 months = 130 hours per month.

• Minimum Essential Coverage (MEC): MEC refers to health coverage qualified as minimum essential coverage under an eligible employer-sponsored plan.

• Minimum Value: A plan provides minimum value if the plan pays at least 60 percent of the cost of benefits.

• Limited Non-Assessment Period: A limited non-assessment period refers to a period during which an ALE member is not subject to an Employer Shared Responsibility payment under section 4980H(a) of the Internal Revenue Code, and in certain cases under section 4980H(b), for a full-time employee, regardless of whether the employee is offered health coverage during that period.