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Exemptions for State Employees & U.S. Territories


  1. You must track hours for state employees if their employer – the state government – classifies as an Applicable Large Employer, meaning that the organization has 50 or more full-time employees and full-time equivalents. The Affordable Care Act is such far-reaching legislation that no employer is exempt if the organization meets this count. Also not exempt are federal, local and Indian Tribal Government employers.
  2. Companies in the U.S. Virgin Islands and the territories of Guam, Puerto Rico, American Samoa and the Northern Mariana Islands do not have to do the regulatory reporting required of U.S. businesses stateside under the Affordable Care Act. You can argue whether “exempt” is the precise word for this odd situation, where a strict interpretation of “state” has led to the Department of Health and Human Services saying that certain aspects of the law don’t apply to U.S. territories. In this case, insurers in the territories have to accept everyone seeking a health plan, but residents of the territories do not have to show that they have a health plan nor are they able to get a subsidy for a health plan. Since an employee’s Form 1095-C is proof that they were offered coverage, it’s not needed in a part of the United States when no such proof is required.

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Last Review: 8/12/2022 – Revision: 2.0

Applies To: ACA Reporting Requirements, ACA Compliance solution

Categories:  Year End – 1095 & Filing

Keywords:  Exempt

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