Q: Has the Internal Revenue Service (I.R.S) released the affordability percentage for Applicable Large Employers (ALE)? Are there any new requirements that I need to consider when filing my 6055 and 6056 forms?

A: On August 23, 2023, the IRS announced in Rev. Proc. 2023-29 the 2024 affordability percentage or 8.39% for plan years beginning on or after January 1, 2024.  Employer groups who have a calendar year plan and plan to use the Federal Poverty Level Safe Harbor must set the single contribution for the lowest cost plan at or below $101.94 per month. The amount that non-calendar year plans can charge will be dependent on the 2024 Federal Poverty Level and the date the dollar amount is released. Employers should work with their consultants to determine the amount they can charge to be compliant. As a reminder, an ALE is defined generally as an employer who has 50 or more Full-Time Equivalent Employees in the prior calendar year. 

The IRS has also implemented a final rule which drastically lowers the 250 individual statements requirement for electronic filing for the 6055 and 6056 returns. The electronic filing requirement will apply to small employers who have a self-insured plan, level funded plan or Individual Coverage Health Reimbursement Account in addition to an ALE. Beginning in 2024, employers must file electronically if they have 10 or more information returns.  Reporting entities must aggregate most information returns, such as Forms W-2, 1099, 1094-C, and 1095-C, to determine if the 10 returns threshold for electronic filing is met.  

Liberty Employee Benefit Clients should reach out to our compliance consultant to discuss solutions if they are not currently filing electronically. Gina Conroy can be reached at ginaconroy@libertyins.com.