The Power of 20 Minutes: How Short Breaks Improve Productivity

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As an insurance provider, we’ve seen firsthand how work-related stress and burnout can lead to increased claims and health issues. But what if we told you that something as simple as a 20-minute break could make a significant difference in keeping your team healthy, productive, and engaged at work?

We get it—taking breaks during the workday can feel like you’re losing time or slowing down. But research shows that short, intentional breaks can actually improve productivity and help employees stay healthier in the long run. And for companies watching their bottom line (like us), that’s a win-win situation.

The Science Behind Breaks

First off, let’s talk science. Our brains aren’t wired to focus for hours on end. Studies have shown that we work best in short bursts. Ever heard of the Pomodoro Technique? It’s a time management method where you work for 25 minutes and then take a short break. The idea is that these mini breaks keep your brain fresh, allowing you to maintain your focus and creativity throughout the day.

Here’s how it works: when you focus on a task for a long time, your brain’s energy reserves start to deplete. Taking a break—especially a short one—helps recharge your mental batteries so that when you get back to work, you’re sharper and more efficient. Think of it like a quick pit stop in a race. Sure, you lose a little time stopping, but you come back refreshed and ready to speed up.

Why 20 Minutes?

Now, why 20 minutes? Good question. Twenty minutes is long enough to step away, clear your mind, and let your brain reset, but not so long that you lose momentum. It’s the sweet spot. Plus, it’s easy to fit into even the busiest schedules.Whether you’re in the middle of a marathon work session or just need a quick reset in between meetings, a 20-minute break is the perfect way to recharge. 

A Smart Move for Employers

You might be wondering, “Why should I encourage my employees to take more breaks when I need them working?” But here’s the thing: encouraging breaks isn’t about losing productivity—it’s about caring for your employees’ well-being, which can ultimately boost their performance.

When your team is healthy and well-rested, they’re more engaged, less likely to burn out, and less likely to face stress-related health issues. By supporting their need for breaks, you’re helping them stay energized and focused, which leads to better outcomes for your business in the long run. It’s a small investment in their health that pays off with a more productive, motivated workforce.

The Health Benefits of Breaks

Short breaks aren’t just about improving productivity—they’re also key to supporting employee health, which has a direct impact on your company’s healthcare costs. Here are some of the health benefits that 20-minute breaks can offer:

  • Reduced Stress: High stress levels can lead to serious health issues, including heart disease, hypertension, and mental health challenges. Short breaks give employees a chance to decompress, reducing overall stress levels and helping them stay healthier.
  • Improved Posture and Physical Health: Sitting for hours on end can lead to chronic back pain and other musculoskeletal issues, which are common (and costly) workplace health problems. Encouraging employees to stand, stretch, or take a walk during their breaks can help reduce these risks.
  • Better Mental Health: Breaks can improve mood, reduce feelings of burnout, and help prevent mental fatigue. Healthier, happier employees are less likely to need time off for mental health issues, which can keep insurance claims lower and minimize disruption in the workplace.

For Employers: How to Encourage Healthy Breaks

As an employer, you can help create a culture that values breaks as part of a healthy, productive work environment. And it doesn’t have to cost you a thing! Here are a few ways to encourage breaks without losing out on productivity:

  • Lead by Example: Show your employees that it’s okay to take breaks by taking them yourself. When leadership sets the tone, it becomes easier for everyone else to follow suit.
  • Designate Break Spaces: Create inviting break areas where employees can relax, recharge, and clear their minds. Whether it’s a cozy corner with comfy chairs or a simple outdoor space, having a designated area encourages people to step away from their desks.
  • Encourage Physical Activity: Remind employees to move around during their breaks. Even a quick walk around the block can do wonders for mental clarity and physical health.
  • Make Breaks Part of the Routine: Encourage employees to build breaks into their daily schedules. By setting reminders or using time management techniques like Pomodoro (25 minutes of work followed by a 5-minute break), employees can integrate breaks into their workflow naturally.

The Long-Term Benefits for Employers

Investing in employee health by encouraging breaks can pay off in multiple ways for employers. Not only will you see an increase in productivity, but you’ll also help reduce the risk of costly insurance claims related to workplace stress, repetitive strain injuries, and mental health issues.

In the long run, companies that foster a healthy, balanced work environment often experience lower employee turnover, higher job satisfaction, and a stronger bottom line. Healthier employees need fewer sick days and medical interventions, and that can mean lower healthcare premiums and fewer claims on your insurance.

Final Thoughts

The next time you catch yourself or your employees grinding away without a break, remember the power of 20 minutes. It’s a simple, cost-effective way to improve productivity, reduce stress, and support long-term health. And for employers, that’s an investment that goes beyond the bottom line—it’s about creating a workplace where your team can thrive.

By encouraging regular breaks, you’re not just boosting productivity for the day—you’re helping to build a healthier, more resilient workforce for the future. And that’s something every business can get behind.

Any Questions?

We are in the business of providing healthcare to everyday people, ensuring peace of mind through trust and transparency.

Our customer service is what sets us apart. We work when you work. Our carrier partners have given us exclusive offerings to complement our medical plans, giving you the best possible price. Our speed of implementation and innovative approach to benefit coverage is second to none.


Learn more about us and our services, here.

Tips to Combat the Negative Effects of Sitting

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Sitting is now one of the most common daily activities. Increased desk jobs and a bigger than ever stay-at-home workforce have contributed to more sedentary lives.

In fact, over a quarter of Americans sit for more than eight hours a day, and most sit for six to eight hours a day according to a report by TIME.

They call the results of sitting “the new smoking” because of the negative impacts it can have on your body. Do you sit all day? Are you tired of tight hamstrings or back pain?

Read more

What ALEs Need to Know About Benefits in 2025

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The 2025 open enrollment season is coming up fast, and employers need to decide how to keep health plans affordable for their employees.

The IRS has made important changes this year, so it’s critical for Applicable Large Employers (ALEs) to stay updated and adjust their plans as needed. This guide explains what ALEs should focus on in 2025.

The 2025 Affordability Threshold

In 2025, the affordability threshold will increase from 8.39% to 9.02% of an employee’s household income. This means that for health coverage to be considered affordable under the ACA, the employee contribution for self-only coverage cannot exceed 9.02% of their household income.

While this is an increase, it still has important implications for how employers manage their health plan offerings and set employee contribution levels.

Why the 2025 Affordability Threshold Matters

More Employees May Be Eligible for Subsidies

With the threshold rising to 9.02%, more employees might find that their employer-sponsored coverage is considered unaffordable, making them eligible for subsidies through the Health Insurance Marketplace (Exchange).

Potential Employer Penalties

Employers with unaffordable plans may face penalties under the ACA’s Employer Shared Responsibility provisions. The penalties are based on whether employees purchase subsidized coverage through the Exchange. Employers need to ensure their contributions are aligned with the updated threshold to avoid these penalties.

Necessary Adjustments for Employee Contributions

Safe Harbor Adjustment

For ALEs using the safe harbor method to determine employee contributions, adjustments should be made for the lowest-cost, self-only plan based on the updated affordability threshold of 9.02% in 2025. The IRS offers this safe harbor to help employers determine whether they are offering affordable coverage.

Employers need to calculate the maximum allowable contribution so that it does not exceed 9.02% of the employee’s household income. If these contributions are not properly adjusted, employers risk incurring penalties.

Non-Calendar Year Plans

For organizations that operate on a non-calendar-year plan, it’s advisable to wait for the U.S. Department of Health and Human Services (HHS) to publish the 2025 Federal Poverty Guidelines before finalizing employee contribution amounts. This ensures compliance with the most current federal guidelines.

Leveraging the Rate of Pay Safe Harbor for Pacific Northwest Employers: Higher Minimum Wages Provide Opportunities

Employers in states like Washington and Oregon, where minimum wages are higher than the federal minimum wage, can take advantage of the Rate of Pay safe harbor method. This allows employers in these regions to potentially offer more generous contributions while staying within the affordability threshold.

For example, in Portland, Oregon, the minimum wage is expected to rise to $16.00 per hour in 2025. Under the Rate of Pay method, the maximum allowable employee contribution for self-only coverage would be $230.43 per month. This is higher than the $109.65 allowed under the Federal Poverty Line (FPL) method, offering flexibility to employers who wish to provide more comprehensive benefits.

Key Actions for Employers in 2025

Review Safe Harbor Options

Employers should begin by reviewing the three safe harbor methods (W-2 wages, Rate of Pay, and Federal Poverty Line) to determine which method works best for their employee population and compensation structure.

Calculate Employee Contributions

Employers should calculate the maximum allowable employee contributions for the lowest-cost, self-only plan, ensuring they do not exceed the new threshold of 9.02%. Accuracy in these calculations is crucial to ensure compliance.

Consider Regional Variations

In areas like the Pacific Northwest, where minimum wages are higher than the federal minimum, employers may have an opportunity to offer more generous contributions without breaching the affordability threshold.

Monitor Federal Poverty Guidelines

Employers using the FPL safe harbor method should wait for the publication of the 2025 Federal Poverty Guidelines to finalize contribution amounts. This ensures calculations are based on the most accurate and up-to-date federal data.

Understanding the ACA Employer Shared Responsibility Payments: Part A and Part B Penalties

Employers need to understand the penalties for failing to comply with the ACA’s Employer Shared Responsibility provisions:

  • Part A Penalty: This applies when an ALE does not offer minimum essential coverage to nearly all full-time employees, and at least one employee buys coverage through the Exchange and receives a premium subsidy. The penalty is $255 per month for each full-time employee (excluding the first 30 employees) in 2025.
  • Part B Penalty: This applies when an ALE offers coverage that is not affordable. If at least one employee purchases coverage through the Exchange and receives a subsidy, the employer will face a penalty of $380 per month for each employee receiving the subsidy in 2025.

Staying Compliant in 2025

To stay compliant with the ACA in 2025, employers must ensure that their health plans meet the updated affordability threshold of 9.02%. By taking the following steps, employers can avoid penalties and continue to provide affordable health coverage to their employees:

  • Review the three safe harbor options for setting employee contributions.
  • Carefully calculate employee contributions to ensure they do not exceed 9.02% of household income.
  • Stay informed about the latest Federal Poverty Guidelines and regional wage variations.

Still Have Questions?

We serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act. We provide affordable benefits for the everyday person. We are different because of our personal service, speed of implementation, and innovative approach to providing benefits coverage.

Learn more about us and our services, here.

Mastering ACA Jargon: ALE Term Guide

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Navigating the intricacies of the Affordable Care Act (ACA) can often feel like deciphering a complex code. One of the key aspects that businesses need to understand is the concept of “Applicable Large Employers” (ALEs) and the associated terms. 

 

In this guide, we’ll break down these ALE terms to help you make sense of your ACA compliance responsibilities and avoid costly penalties.

First, What is an ALE?

At the heart of ACA compliance lies the distinction between small and large employers. An ALE, or Applicable Large Employer, is an employer that meets specific criteria regarding the size of its workforce. Under the ACA, an ALE is defined as an employer that employed, on average, at least 50 full-time employees (including full-time equivalent employees) during the preceding calendar year.

Minimum Essential Coverage (MEC) Terms

MEC (Minimum Essential Coverage) is a term you’ll encounter frequently in ACA discussions. It refers to health coverage that meets the minimum requirements set by the ACA. Put simply, if your plan qualifies as MEC, it satisfies the basic ACA coverage criteria.

 

Minimal Value Coverage, on the other hand, means that your employer-sponsored health plan covers at least 60 percent of the total allowed cost of benefits under the plan. In practical terms, it ensures that your plan offers substantial coverage to your employees.

 

Essential Health Benefits: MEC plans must cover essential health benefits, which include services like preventive care, emergency services, maternity and newborn care, prescription drugs, and more. Understanding what constitutes essential health benefits in your plan is essential.

Additional ALE Terms

Minimum Value Standard: This is the benchmark used to determine if an employer-sponsored plan offers sufficient coverage. A plan must cover at least 60% of the total allowed cost of benefits to meet the minimum value standard.

 

Safe Harbor Methods: These are simplified approaches that employers can use to determine whether their health coverage meets the affordability requirement. The three common safe harbor methods are the Form W-2, Rate of Pay, and Federal Poverty Line (FPL) safe harbors.

 

Full-Time Equivalent (FTE) Calculation: Employers use this calculation to determine how many full-time equivalent employees they have when factoring in part-time and variable-hour employees. It’s essential for determining ALE status.

 

Affordable Care Act (ACA) Reporting: This term encompasses the process of reporting compliance with the ACA to the IRS and providing employees with relevant information about their coverage through forms 1094-C and 1095-C.

 

Dependent Coverage: The ACA requires ALEs to offer affordable coverage to full-time employees’ dependents. Employers should understand who qualifies as a dependent under the ACA.

 

Minimum Essential Coverage (MEC) Offer: ALEs must offer MEC to at least 95% of their full-time employees to meet the ACA requirements. Understanding what constitutes MEC is crucial.

 

Affordability Safe Harbors: These are specific methods that employers can use to determine if the coverage they offer is affordable for their employees. They include the Form W-2, Rate of Pay, and Federal Poverty Line (FPL) safe harbors.

 

Full-Time Employee Look-Back Measurement Periods: Employers can use these periods to determine the full-time status of employees for ACA compliance. The standard measurement period, stability period, and administrative period are essential components of this calculation.

 

Premium Tax Credits: These are subsidies provided to eligible individuals and families to help them afford health coverage purchased through the Health Insurance Marketplace. Employers should be aware of how their employees’ access to these credits can affect ACA compliance.

 

Minimum Value Calculator: This is a tool employers can use to determine if their health plans meet the minimum value requirement. It helps ensure that the plan covers at least 60% of allowed costs.

 

Reporting Entity: Employers may need to determine which entity within their organization is responsible for ACA reporting. This can vary depending on the structure of the company.

 

Grandfathered Plans: Some plans that existed before the ACA was enacted may be considered grandfathered, exempt from certain ACA requirements. Understanding the criteria for grandfathered plans is important.

Frequently Asked Questions (FAQs) About ACA Compliance

 

What is the ACA, and how does it impact employers?

The Affordable Care Act (ACA) is a federal law designed to make healthcare more accessible and affordable for Americans. For employers, it introduces regulations related to employee health insurance coverage. It defines Applicable Large Employers (ALEs) and mandates they provide affordable health coverage to their full-time employees.

 

How is an Applicable Large Employer (ALE) determined?

An ALE is an employer that, on average, employed at least 50 full-time employees (including full-time equivalent employees) during the preceding calendar year. Full-time employees work, on average, at least 30 hours per week or 130 hours per month.

 

What is Minimum Essential Coverage (MEC), and why is it important?

MEC refers to health coverage that meets the minimum requirements set by the ACA. It’s crucial because ALEs must offer MEC to at least 95% of their full-time employees to meet ACA requirements. MEC ensures employees have basic healthcare coverage.

 

How can I determine if my health plan meets the Minimum Value Standard?

The Minimum Value Standard requires an employer-sponsored plan to cover at least 60% of the total allowed cost of benefits. You can use the Minimum Value Calculator or consult with a benefits professional to assess your plan’s compliance.

 

What are Safe Harbor Methods, and how can they help with affordability calculations?

Safe Harbor Methods are simplified approaches employers can use to determine whether their health coverage meets affordability requirements. Common safe harbor methods include the Form W-2, Rate of Pay, and Federal Poverty Line (FPL) safe harbors, which provide alternative ways to assess affordability.

 

What penalties could my business face for non-compliance with ACA regulations?

Non-compliance with ACA regulations can result in significant penalties. Penalties may apply if you fail to offer MEC, the coverage is not affordable, or if at least one full-time employee receives premium tax credits through the Health Insurance Marketplace.

 

Are there any exemptions or special provisions for small businesses?

Small businesses with fewer than 50 full-time employees are generally exempt from the ACA’s employer mandate requirements. However, they may still choose to offer healthcare benefits voluntarily.

 

How can I ensure I’m accurately reporting ACA compliance to the IRS and employees?

To report compliance, employers must use forms 1094-C and 1095-C. It’s crucial to maintain accurate records and ensure that the information submitted is timely and error-free. Consider consulting with a tax professional or ACA compliance specialist for assistance.

 

What should I know about Premium Tax Credits and their impact on ACA compliance?

Premium Tax Credits are subsidies provided to eligible individuals and families to help them afford health coverage through the Health Insurance Marketplace. Employers should be aware that employees’ access to these credits can affect ACA compliance, particularly if your coverage is not affordable.

 

How often do ACA regulations change, and how can I stay updated?

ACA regulations can evolve, so it’s essential to stay informed. Regularly check official IRS resources and consider working with ACA compliance experts who stay up-to-date with changes and can provide guidance on compliance adjustments.

Any Questions?

We serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act. We provide affordable benefits for the everyday person. We are different because of our personal service, speed of implementation, and innovative approach to providing benefits coverage.

 

Learn more about us and our services, here.

What Exactly is Telemedicine?

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Healthcare providers have been offering remote services for years, which have allowed patients to receive healthcare from the comfort of their own homes.

However, modernly, telemedicine services became a necessity and are now a common tool utilized by many patients and healthcare professionals.

Why? These phone and video calls help patients protect themselves and others as well as provide a host of other benefits (but more on this later!) 

In this article, we’ll discuss what telemedicine is, the types of telemedicine, and when patients should be using these services. Let’s dive in.

What is Telemedicine?

Telemedicine allows healthcare providers to connect with patients without an in-person visit. Telemedicine services are provided primarily online or via smartphone through video chats or phone calls.

What is the Difference Between Telehealth and Telemedicine?

The terms “telemedicine” and “telehealth” are often used interchangeably, though the two have a few key differences: telemedicine refers specifically to remote clinical services and telehealth can refer to remote non-clinical services. 

Telemedicine, as stated by the World Health Organization, is “healing from a distance.” You receive treatment without an appointment or visiting the office.

Telehealth uses electronic information to support long-distance clinical healthcare, education, and administrative activities. It improves patient care and physician education rather than providing a service. Telehealth involves scheduling appointments, medical education continuation, and training for physicians.

In short, all telemedicine is telehealth, but not all telehealth is telemedicine. 

TYPES OF TELEMEDICINE

Using telemedicine, you can discuss symptoms and medical issues, receive a diagnosis, learn treatment options, and get prescriptions. There are a few common types of telemedicine which include:

REAL-TIME OR INTERACTIVE MEDICINE

Interactive telemedicine, also commonly referred to as real-time or live telemedicine,  involves a physician and patient communicating in real-time.  

Real-time telemedicine involves any two-way communications –such as video conferencing and phone calls – that let providers and patients talk and allows healthcare providers to offer medical care. 

Some common services provided via interactive telemedicine include assessments of medical history, basic visual examinations, psychiatric evaluations, and even ophthalmic tests.

REMOTE PATIENT MONITORING

Remote patient monitoring gives caregivers the ability to monitor patients who have medical equipment that collects information like blood pressure, blood sugar levels, and more.

Through technology, information is sent to healthcare professionals and allows them to provide care and keep an eye on patients without the patients needing to visit in person. 

Remote patient monitoring can result in benefits such as reducing the time a patient needs to be in the hospital, reducing a patient’s exposure to other illnesses present in a healthcare building, as well as giving the patient time to recover at home. 

Remote patient monitoring is especially effective for chronic conditions such as heart disease, asthma, and diabetes.

STORE AND FORWARD PRACTICES

In telemedicine, store and forward practices allow providers to share their patient’s information with other healthcare specialists and professionals.

The most significant advantage of these practices is that it doesn’t require the simultaneous attention of the delivering and receiving parties.

Many healthcare professionals—such as field technicians, caregivers, or specialists, for example—can collect the necessary data and upload it for use by other healthcare professionals.  

WHEN SHOULD YOU USE TELEMEDICINE?

Telemedicine is for straightforward questions and issues, and any follow-up consults. It also can be helpful with psychotherapy and teledermatology. Some examples of straightforward issues include cold and flu symptoms, insect bites, diarrhea, pink eye, and sore throats.

Telemedicine has advanced our current health care options by offering several new benefits. It is making healthcare accessible for more patients, whether they live in a remote location, have a packed schedule, or any number of other reasons.

WHEN SHOULD YOU NOT USE TELEMEDICINE?

Telemedicine is not for emergencies. For anything that requires urgent, primary care, you should go to a doctor in person. 

BENEFITS OF TELEMEDICINE

Telemedicine Saves Time 

These services also help people avoid unnecessary hospital visits, which helps healthcare professionals give advice at a distance, save time, and reduce costs for both patients and doctors. Not only will it help avoid hospital visits when they aren’t necessary, but it will also give patients in the hospital the ability to discharge sooner by monitoring their vitals with telemedicine.

Telemedicine is Affordable

A recent study found that the average telemedicine visit is around $79, whereas an average doctor’s appointment is $149, and a trip to the emergency room costs, on average, $1,734. As telemedicine continues to grow, health insurance providers are offering coverage for telemedicine visits. Some states even require that health insurance plans reimburse patients for telemedicine visits.

Telemedicine is Accessible

Telemedicine offers a more accessible opportunity for healthcare and changes the way we visit the doctor. At SBMA we offer the most competitive limited benefit plans in the industry, including virtual health options! Check out our services for more information!

Read on for the pros and cons of telemedicine.

The Pros and Cons of Minimum Essential Coverage (MEC) Plans: Is It Right for Your Business?

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In healthcare, businesses have a lot of choices when it comes to providing health insurance for their employees. One option that has gained attention, particularly among smaller businesses and those seeking to comply with the Affordable Care Act (ACA), is Minimum Essential Coverage (MEC) plans. 

These plans offer a set of benefits designed to meet ACA requirements, but they also come with their own set of advantages and disadvantages. In this article, we’ll delve into the pros and cons of MEC plans to help you determine if they are the right fit for your business.

WHAT IS MEC AND WHAT DOES IT COVER?

 

For all the details about what MEC is and what is covers, check out our guide, here.

Pros of Minimum Essential Coverage (MEC) Plans:

Affordability: MEC plans are often more budget-friendly for both employers and employees. They typically have lower premium costs compared to comprehensive health insurance plans, making them an attractive option for small businesses and cost-conscious individuals.

ACA Compliance: One of the primary advantages of MEC plans is their compliance with the ACA’s individual mandate. By offering MEC to your employees, you can avoid penalties associated with not providing health coverage, thus ensuring legal compliance.

Preventive Services: MEC plans cover essential preventive services at no cost to the employee. This includes vaccinations, screenings, and wellness check-ups, which can help identify health issues early and promote overall well-being.

Employee Retention: Offering any form of health coverage, including MEC plans, can enhance employee retention. It signals to your workforce that you care about their health and well-being, which can lead to increased job satisfaction and loyalty.

No Pre-existing Condition Exclusions: MEC plans cannot deny coverage or impose pre-existing condition exclusions. This means that employees with pre-existing medical conditions can access necessary care without fear of rejection.

Minimal Administrative Burden: MEC plans are relatively straightforward to administer compared to more comprehensive health insurance options. This can save businesses time and resources.

Cons of Minimum Essential Coverage (MEC) Plans:

Limited Coverage: While MEC plans meet ACA requirements, they offer limited coverage compared to more comprehensive health insurance options. They often cover only preventive services and may not provide coverage for major medical expenses, such as surgeries or hospital stays.

No Minimum Value: MEC plans do not meet the minimum value standard set by the ACA. This means they may not cover a substantial portion of medical costs, leaving employees with significant out-of-pocket expenses for major healthcare needs.

Employee Dissatisfaction: Employees may be dissatisfied with MEC plans due to their limited coverage. This can lead to frustration when they discover that their essential medical needs are not adequately covered, potentially affecting morale and job satisfaction.

Limited Network: MEC plans may have a restricted network of healthcare providers. Employees could find that their preferred doctors or hospitals are not included in the plan’s network, limiting their choices for care.

Not Ideal for All Businesses: MEC plans are best suited for businesses with a young, healthy workforce and those primarily seeking ACA compliance at a minimal cost. For businesses with diverse employee demographics and varying healthcare needs, more comprehensive plans may be a better fit.

Making an Informed Decision

Choosing the right health insurance option for your business involves careful consideration of your budget, employee needs, and legal obligations. While MEC plans offer affordability and ACA compliance, their limited coverage may not suit all employees or businesses.

Before making a decision, assess your workforce’s healthcare requirements, and consider alternative options, such as group health plans or health savings accounts (HSAs). It’s essential to strike a balance between cost-effectiveness and meeting the healthcare needs of your employees.

Final Notes

MEC plans can be a viable choice for some businesses, especially those with budget constraints and a focus on complying with ACA regulations. However, they may not provide sufficient coverage for all employees, and careful evaluation of your workforce’s needs is crucial. Ultimately, the decision should align with your company’s goals, financial capacity, and commitment to employee well-being. To make an informed choice, consider consulting with an insurance expert or benefits consultant who can provide guidance tailored to your specific circumstances.

Any Questions?

We serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act. We provide affordable benefits for the everyday person. We are different because of our personal service, speed of implementation, and innovative approach to providing benefits coverage.

Learn more about us and our services, here.

1094/1095 PCORI Compliance: What You Need to Know

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Businesses that provide health benefits for their employee workforce must submit the right forms proving that they offered the required benefits. Now that 1094/1095 filing is complete, it’s time to prepare for federally mandated annual PCORI fees. Are you prepared? Let’s discuss 1094, 1095, and PCORI compliance. 

How Can Applicable Large Employers Stay Compliant?

Applicable Large Employers (ALEs), employers with 50 or more full-time employees, must offer Affordable Care Act (ACA) compliant health benefits to at least 95% of their workforce. Failure to do so can result in hefty fines and penalties from the Internal Revenue Service (IRS). 

The IRS can issue ALEs Penalty A or Penalty B fines for each employee that is not offered correct or compliant benefit plans. Employers can avoid unnecessary fines and penalties by offering ACA Compliant Minimum Essential Coverage (MEC). MEC benefit plans allow employers to provide affordable benefits to their employees without compromising their bottom line. 

In order to verify employers are, in fact, offering ACA compliant benefits, the IRS requires employers to fill out form 1094 and 1095. 

Employers must complete Form 1094, which is used to determine their liability for payment under the employers’ shared responsibility provision. Form 1095, however, is used as a summary of healthcare information the ALE offers employees. 

What Can SBMA Do For You?

One of the many services we provide at SBMA Benefits is 1094 and 1095 Form processing. We simplify the complexity of providing employee benefits while simultaneously ensuring ACA compliance. 

What’s included in our 1094/1095 processing?

  • Electronic filing of 1094 and 1095 forms annually 
  • PDF soft copies of 1095 for employee distribution 
  • 1095 error corrections refiling (if applicable) 
  • Mail distribution

What Happens After I Submit Forms 1094 and 1095?

Forms 1094 and 1095 must be submitted by March 31 (electronic filing) or February 28 (paper filing) of the year following the reporting year.

The PCORI fee payment is due by July 31 of the year following the last day of the plan year, with extensions applicable if the date falls on a weekend or legal holiday.

What is PCORI and Why Do I Have to Pay Their Fees?

PCORI was created to improve the quality, quantity, timeliness, and trustworthiness of health information for patients. 

According to the PCORI, its mission is to “help people make informed healthcare decisions, and improve healthcare delivery and outcomes, by producing and promoting high-integrity, evidence-based information that comes from research guided by patients, caregivers, and the broader healthcare community.”

Employers are responsible for paying PCORI trust fund fees annually. The amount employers owe depends on the number of people enrolled in their offered benefits program. 

The fee is calculated based on the average number of individuals covered in a benefits plan, including spouses, dependents, retirees, and COBRA participants. As of 2024, the PCORI fee is $3.00 per enrollee. For reference, the PCORI fee in 2023 was $2.79 per enrollee, and in 2021, it was $2.66 per enrollee.

Employers should ensure that they calculate these fees accurately based on their plan enrollment and submit the payment by July 31 of the following year to remain compliant.

The fee was slated to end in 2019, but was extended via Trump’s Further Consolidated Appropriations Act of 2020. For now, PCORI fees are extended through 2029. 

7 Key Strategies to Ensure ACA Compliance and Prevent Penalties

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The Affordable Care Act (ACA) has been a game-changer for employee health care benefits since it was introduced. It’s opened up new opportunities but has also brought along some tricky challenges, especially when it comes to federal reporting compliance. With the IRS becoming more aggressive in enforcing these regulations, it’s crucial for HR and benefits leaders to stay on top of their game.

In this article, we’ll cover why accurate data is essential for ACA compliance and share seven strategies to help you keep your data accurate and complete.

Why Accurate Data is Critical for ACA Compliance

To comply with the ACA, you need to report detailed information about your employees and their health care coverage. This includes data such as names, Social Security numbers, hours worked, and the health benefits offered. Accurate and complete data is not just a formality; it’s essential for staying compliant and avoiding costly penalties.

Penalties for non-compliance can be severe. For example:

  • 4980H(a) Penalty: If your company fails to offer affordable health coverage to at least 95% of full-time employees and one employee receives a Premium Tax Credit (PTC) through the ACA marketplace, the penalty is $247.50 per month per employee. This could add up to over $800,000 annually for a company with 300 employees.
  • 4980H(b) Penalty: This penalty applies if your coverage is either unaffordable or does not meet the Minimum Value standard. In 2024, the penalty is $372 per month, or $4,460 per year, per employee.
  • Failure to File Penalty: Missing the deadline for filing 1095-C forms can result in fines of $310 per return in 2024, increasing to $630 for intentional disregard.
  • Failure to Furnish Penalty: Similar to the failure to file penalty, this can be $310 per return, rising to $630 for intentional disregard.

Keeping accurate records of employee demographics and medical coverage information is crucial for avoiding these penalties.

What Data You Need for ACA Compliance

1. Demographic Data

  • Full Names and Social Security Numbers: Ensure you have the correct information for all employees.
  • Employment Status: Track whether employees are full-time, part-time, or seasonal. Also, record any changes in employment status throughout the year.
  • Dates of Employment: Keep records of when employees are hired and when they leave.
  • Hours Worked: This is important for determining full-time status under the ACA. Full-time status is based on hours worked, not the type of payment.

2. Medical Coverage Information

  • Coverage Dates: Know when each employee’s coverage starts and ends.
  • Coverage Tiers: Record whether employees are covered alone, with a spouse, or with their family.
  • Coverage Offered and Declined: Document what health benefits were offered to employees and whether they accepted or waived them.

7 Strategies to Keep Your ACA Data Accurate

1. Conduct Regular Audits

Regular audits help you catch and fix errors or missing information. Verify Social Security numbers, hours worked, and the health benefits offered. Regular checks will help you stay compliant and avoid last-minute stress.

2. Continuously Track Employee Status

Maintain accurate records of employee status changes—whether full-time, part-time, or seasonal. This includes tracking hiring and termination dates, status changes, and leaves of absence. Keep your system updated in real time to ensure accuracy.

3. Make Technology Your Ally

Invest in HR technology such as HRIS (Human Resource Information System), HRMS (Human Resource Management System), or a benefits administration system. These systems can automate data verification, reduce errors, and ensure accuracy. Look for technology partners with ACA validation features to streamline the reporting process.

4. Track Compliance Benchmarks Efficiently

An advanced HR system can track compliance benchmarks and alert you to important deadlines. This reduces the risk of missing crucial tasks and ensures you stay on top of your compliance requirements.

5. Educate Employees

Educate your employees about the importance of accurate data. This includes initial onboarding and ongoing training about ACA requirements. Keep communication channels open so employees understand how their data impacts compliance.

6. Collaborate with IT

Work closely with your IT department to ensure data integration systems are running smoothly. While benefits and HR focus on data accuracy, IT ensures that systems integrate and function properly.

7. Integrate and Verify All ACA Data

Ensure data accuracy across all platforms. Use automated data integration to reduce human error and conduct regular audits to verify the correctness of integrated data. Centralizing data management makes it easier to access, manage, and verify information.

Making ACA Compliance Simpler

Staying compliant with the ACA can be complex, but it doesn’t have to be overwhelming. Here’s a simplified plan to get started:

  • Robust Onboarding: Collect all necessary data during the new-employee onboarding process.
  • Regular Data Audits: Schedule audits to keep ACA-related employee information up-to-date and accurate.
  • Leverage Technology: Use HR technology to streamline data management and integrate all systems handling employee data.

By implementing these strategies, you can make ACA compliance more manageable and avoid hefty penalties. Start by seeking advice from ACA and benefits administration experts to refine your data practices and stay compliant with ACA regulations.

Still Have Questions?

We serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act. We provide affordable benefits for the everyday person. We are different because of our personal service, speed of implementation, and innovative approach to providing benefits coverage.

Learn more about us and our services, here.

ACA Reporting Penalties for 2025: What You Need to Know

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As we look ahead to 2025, organizations must be aware of significant updates regarding ACA information reporting penalties. The IRS has recently revised these penalties under Revenue Procedure 2023-34, imposing stricter consequences for non-compliance with the Affordable Care Act’s (ACA) requirements outlined in Internal Revenue Code Sections 6055 and 6056. 

With the 2024 filing deadlines now behind us, it’s crucial to focus on preparing for next year’s filings and understanding the implications of these updated penalties. These changes will affect the information returns and statements due in 2025, emphasizing the importance of timely and accurate reporting.

Understanding General Reporting Penalties under ACA Sections 6055 and 6056

Entities failing to meet the reporting requirements of ACA Sections 6055 and 6056 may incur penalties under the general guidelines, including:

1. Failure to File Correct Information Returns

Penalties under Code Section 6721 may apply if information returns (e.g., Form 1095) are not filed accurately or on time.

2. Failure to Furnish Correct Payee Statements

Penalties under Code Section 6722 apply when statements (e.g., Form 1095-C) require corrections before the deadline for individuals.

Understanding Waivers and Reductions of ACA Penalties

Penalties for ACA reporting may be eligible for waivers under reasonable cause and not willful neglect.

Additionally, penalties can be reduced if reporting entities correct errors within a specified timeframe.

Adjusted Penalty Amounts for 2025 Reporting

Penalties for filing information returns and providing individual statements in 2025, based on 2024 data, have been adjusted:

  • Failing to file or provide a statement now incurs a penalty of $330 per return or statement, up from $310.
  • Corrections made within 30 days of the due date remain at $60 per return or statement.
  • Corrections made after 30 days but before August 1, 2025, will result in a penalty of $130 per return or statement, up from $120.
  • Intentional disregard now carries a penalty of $660, increased from $630, or 10% of the total required to be reported, whichever is greater. 

Penalty limits vary by business size, with small businesses facing lower maximum penalties, except for intentional disregard cases, which can exceed other penalties based on the violation’s severity. These adjustments underscore the importance of complying with ACA reporting requirements under Sections 6055 and 6056.

2025 Deadlines for 2024 Information Returns

The deadlines for furnishing individual statements for the 2024 calendar year are as follows:

Individual Statement Furnishing Deadline: March 3, 2025

Statements must be furnished within 30 days of January 31, 2025. Since January 31 falls on a weekend, the deadline is extended to March 3, 2025.

Electronic IRS Filing Deadline: March 31, 2025

For the 2024 calendar year, electronic IRS returns must be filed by March 31, 2025. These deadlines are critical for entities adhering to reporting requirements under Sections 6055 and 6056 of the Internal Revenue Code. Non-compliance may lead to penalties adjusted for the 2024 filings.

Understanding ACA Premium Tax Credits and Employer Responsibilities

Under the Affordable Care Act (ACA), employees generally do not qualify for premium tax credits to purchase health plans through the Health Insurance Marketplace if their employer-provided health coverage meets affordability and minimum value standards. Minimum value requires that the plan covers at least 60% of allowed costs for benefits, including substantial coverage for hospital and physician services.

For coverage to be deemed affordable, an employee’s contribution for self-only coverage under the lowest-cost plan option cannot exceed 8.39% of their household income for the 2024 tax year. Employers play a crucial role in determining contribution rates and must adhere to ACA affordability rules to avoid penalties. If a full-time employee of an Applicable Large Employer (ALE) receives a premium tax credit due to unaffordable coverage offered by the employer, the employer may face penalties under ACA employer shared responsibility provisions.

Impact on Employers

The newly revised pay-or-play penalty amounts will apply to the 2025 calendar year, necessitating awareness among ALEs. While immediate action may not be required now, it is crucial for ALEs to maintain compliance with ACA regulations throughout the year. This includes accurately identifying full-time employees eligible for affordable coverage to mitigate pay-or-play penalties.

For more detailed information, visit the IRS FAQs page on ACA compliance.

Additionally, the IRS has updated its FAQs document on premium tax credits, providing valuable insights for employees with inquiries about how these credits interact with employer-sponsored health plans.

Still Have Questions?

We serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act. We provide affordable benefits for the everyday person. We are different because of our personal service, speed of implementation, and innovative approach to providing benefits coverage.

Learn more about us and our services, here.

The Future of Employee Benefits: Emerging Trends and Innovations with MEC

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In today’s competitive job market, employers are constantly seeking new ways to attract and retain top talent. One area that has seen significant advancements and innovation is employee benefits. As the workforce evolves, so do the expectations and needs of employees. In this blog post, we will explore the future of employee benefits, focusing on the emerging trends and innovations with a particular emphasis on Minimum Essential Coverage (MEC).

Personalization and Customization

In the future, employee benefits will increasingly focus on personalization and customization. Recognizing that employees have diverse needs and preferences, employers are moving away from one-size-fits-all benefits packages and are offering more flexibility. MEC provides a foundation of basic coverage while allowing employees to choose additional benefits that align with their specific requirements. This level of personalization ensures that employees feel valued and supported, leading to increased job satisfaction and engagement.

The concept of personalization extends beyond traditional health benefits. Employees may have different priorities when it comes to benefits, such as parental leave, flexible work arrangements, or professional development opportunities. Employers can leverage MEC to offer a menu of benefits from which employees can select, tailoring their packages to meet individual needs. This approach not only enhances employee satisfaction but also demonstrates an organization’s commitment to supporting a diverse workforce.

Wellness and Mental Health Support

As organizations prioritize employee well-being, the focus on wellness and mental health support is becoming more prominent. MEC is adapting to this trend by including comprehensive wellness programs as part of the benefits package. These programs may offer access to mental health resources, fitness classes, meditation apps, or even virtual therapy sessions. By proactively addressing employees’ holistic health needs, employers can create a more productive and supportive work environment.

The integration of wellness initiatives into MEC reflects a growing recognition of the importance of mental health in overall well-being. Employers understand that a healthy workforce is a more engaged and productive one. By providing resources and support for mental health, organizations can help employees navigate stress, reduce burnout, and improve overall job satisfaction. Additionally, wellness programs can foster a positive company culture that values employee well-being.

Financial Wellness

Financial wellness is another area gaining traction in the realm of employee benefits. Employers recognize that financial stress can negatively impact employees’ overall well-being and productivity. MEC can incorporate financial education programs, retirement planning resources, and access to financial advisors. By promoting financial literacy and offering tools for long-term financial planning, employers can empower employees to make informed decisions and improve their financial well-being.

MEC can offer benefits such as employer-matched retirement savings plans, automatic contributions to health savings accounts, or access to financial planning tools and workshops. By addressing financial wellness as part of the benefits package, employers can help alleviate employee anxiety around financial matters, enabling them to focus on their work and personal lives. This approach also positions employers as partners in their employees’ long-term financial success.

Flexible Work Arrangements

The COVID-19 pandemic has accelerated the adoption of remote work and flexible work arrangements. In the future, the hybrid work model is likely to become the norm for many organizations. MEC can adapt to this change by providing benefits that cater to the specific needs of remote and flexible workers. This could include virtual healthcare options, telemedicine services, and flexible scheduling for appointments or personal time off. By ensuring that benefits are accessible and relevant regardless of the employee’s location, employers can foster a positive work-life balance.

MEC can support flexible work arrangements by offering benefits that accommodate different work styles. For example, it may include subscriptions to coworking spaces, reimbursement for home office equipment, or technology tools that facilitate remote collaboration. By embracing the changing nature of work and tailoring benefits to remote and flexible workers, employers can attract and retain talent who value work-life integration and flexibility.

Technology and Digital Solutions

Advancements in technology have a significant impact on the future of employee benefits. MEC is embracing this trend by incorporating digital solutions that streamline benefit administration, enrollment processes, and communication channels. Mobile apps, online portals, and AI-powered chatbots enable employees to access information, make benefit choices, and seek assistance conveniently. Technology-driven benefits solutions not only enhance employee experience but also reduce administrative burdens for HR teams.

 

Digital solutions offer employees easy access to benefits information, allowing them to make informed decisions and manage their benefits effectively. With self-service portals and mobile apps, employees can review their coverage, access educational resources, and make changes to their benefits as needed. Additionally, digital communication channels enable efficient and personalized communication between employees and HR teams, fostering transparency and improving employee engagement.

Integration and Data Analytics

Another emerging trend in employee benefits is the integration of different benefits platforms and data analytics. MEC can serve as a central hub that integrates various benefits offerings, including health insurance, retirement plans, wellness programs, and more. This integration allows for a seamless employee experience, simplifying benefit management and ensuring that employees have a holistic view of their benefits.

 

Furthermore, data analytics play a crucial role in optimizing benefits offerings. By leveraging data on employee utilization, preferences, and feedback, employers can gain valuable insights into the effectiveness of their benefits programs. Data analytics can help identify trends, anticipate employee needs, and make data-driven decisions to enhance the overall benefits package.

Regulatory Compliance and Changing Landscape

The future of employee benefits is also influenced by evolving regulatory requirements and societal changes. Employers must stay informed about changing regulations and adapt their benefits offerings accordingly. MEC provides a framework that ensures compliance with minimum requirements while offering flexibility for additional benefits. It allows employers to navigate the complex landscape of healthcare regulations and provide employees with essential coverage.

 

Societal shifts, such as the growing focus on diversity, equity, and inclusion (DEI), also impact employee benefits. Employers are recognizing the need to create benefits packages that address the unique needs of a diverse workforce, ensuring equitable access to opportunities and resources. MEC can be customized to include benefits that support DEI initiatives, such as diverse supplier programs, mentorship programs, or educational resources on unconscious bias.

Final Notes

As the workplace landscape continues to evolve, employee benefits are evolving with it. The future of employee benefits lies in personalization, wellness support, financial well-being, flexibility, and technology-driven solutions. MEC serves as a flexible foundation that can adapt to these emerging trends and innovations, allowing employers to create attractive benefits packages that meet the diverse needs of their workforce.

 

 By investing in forward-thinking employee benefits, organizations can attract top talent, enhance employee engagement, and foster a culture of well-being and productivity. With MEC at the core of their benefits strategy, employers can navigate the changing landscape of employee benefits while providing essential coverage and tailored benefits that empower their employees to thrive.

Any Questions?

We serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act. We provide affordable benefits for the everyday person. We are different because of our personal service, speed of implementation, and innovative approach to providing benefits coverage.

Learn more about us and our services, here.

For more information, check out our comprehensive guide to MEC and what it covers, here.

 

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