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Configuring Global ACA Parameters

Note: This form does not use Client Access Group Security.

To process ACA data properly, you must establish system-level ACA parameters. If necessary, you can also override these at the client level: see Configuring Client ACA Parameters.

Setting Up Global ACA Parameters

To set up global ACA parameters:

Open the Work Centers menu.

Under Work Centers|Compliance, select ACA Processing.

Under ACA Setup and Global Setup, select Global ACA Parameters.

First, set the global safe harbor compensation basis. You can choose one of three options, described by the fields below.

Table 89: Safe Harbor Compensation Bases
Select this field...	to...
Federal Poverty Level (2G Series 2 Code)	Base affordability on the federal poverty amount for the appropriate year, specified in the table below.
Rate of Pay (2H Series 2 Code)	Base affordability on each employee's lowest pay rate during the plan year. You must enter the Benefit Plan Year Start Month and Day.
Form W2 Wages (2F Series 2 Code)	Base affordability on employee Form W-2 wages for the calendar year.

The Rate of Pay Safe Harbor looks at monthly pay for salaried employees. It excludes any salaried employee whose rate of pay dropped from the Safe Harbor consideration during the calendar year.

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For salaried employees, it uses the rate of pay as of the first of the plan year.

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For hourly employees, it uses either the rate of pay at the start of the year or the rate of pay as of the first of each month (whichever is less).

Set the Benefit Plan Year Start Month and Day. These values support benefit plans that are not on a calendar year cycle. You can override this at the client level. If you do not enter a value, the system defaults to January 1.

If your clients use cafeteria plans, select the Cafe Contributions Are For Medical Insurance Only field. The system will take into account the client cafeteria contribution when it calculates the cost of insurance for applicable employees and benefit plans.

The next field is called Enter "Yes" for MEC on 1094 Form Starting In. Beginning with the year selected here, the system will automatically set the Minimum Essential Coverage indicator to "Yes" in the Form 1094-C record. This option overrides the Does NOT Meet ACA Minimum Essential Coverage field on the Group Benefit Plans form.

Select whether you want to Mask Employee SSN on 1095 Forms. This replaces the first five digits with 'X'.

Adjust the data in the Federal Poverty Levels table, as needed. See Setting Federal Poverty Data, below, for details.

10.

The Limited Non-Assessment Period (LNAP) Overrides panel provides three options for adjusting LNAP calculation logic. Select only one option. For details, see Setting LNAP Overrides below.

11.

Configure your look-back period settings in the Periods panel. For details, see Setting Up Look-back Periods

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Click Save.

Setting LNAP Overrides

These parameters relate to IRS code 2D: "Employee in a section 4980H(b) Limited Non-Assessment Period".

By default, PrismHR will assign the 2D series 2 code for the maximum possible LNAP, even if coverage is offered during that period. These settings provide more coding flexibility on Forms 1095‑C for employees who are still within their first 90 days of employment.

Table 90: 2D Override Fields
Field Name	Action
Limit "2D" Status to 3 Months	Limits the 2D offer code to the first 90 days of employment. After 90 days, you must select a different offer code, even if the employee has a mid-month hire date.
Continue "2D" if Employee's Status Changes to Full-Time During LNAP	When an employee’s status changes to full-time, PrismHR will continue using "2D" for up to 3 calendar months, or 4 months if the period includes a partial month. You cannot use this setting to include more "2D" months than defined in the initial measurement period.
End "2D" Period on Offer of Coverage	Prevents the system from defaulting to a "2D" code when the employee's series 1 code reflects an offer of coverage (for example, 1A).

Setting Federal Poverty Data

The Federal Poverty Amount and % of Poverty Level fields are assigned based on plan years, not calendar years.

For example: if the plan year runs from June 1, 2019, through May 31, 2020, the system uses the amounts entered for Plan Year 2019. If the plan year starts on January 1, then the plan year matches the calendar year.

This feature provides flexibility in case the IRS makes changes to the percentage before the start of the next year.

To configure federal poverty data:

Enter the federal poverty amounts for each year. You need to do this for each upcoming year before the end of January of that year. For example, you need to enter the amounts for 2026 before the end of January 2026.

Create a new row in the table.

Select the reporting Year.

Enter the Federal Poverty Amount for a household of one.

Enter the % of Poverty Level the system uses to calculate affordability. Do not include the percent sign: for example, 9.5% = 9.50.

For example: the Federal Poverty Amount for 2015 was $12,000 and the percentage was 9.5%. To determine the affordability of benefits in this year, PrismHR divides 12,000 by 12 to get a monthly amount, and then multiplies the result by 0.095. The final result is $95. If a benefit plan costs an employee more than $95 per month, then it is not considered affordable for ACA reporting.

Setting Up Look-back Periods

Use the Periods panel to set up measurement, administration, and stability periods for new and ongoing employees at the global level. You can override these settings at the client level.

About Look-back Periods

The ACA specifies three periods for determining employee eligibility: Measurement, Administration, and Stability.

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Measurement Period: This look-back period determines whether new variable hour/seasonal employees are full-time (working 130 hours or more within the period). For Ongoing Employees, who have worked one full standard measurement period, this determines the average number of hours they work (130 or more = full-time).

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Administration Period: This is the period between the Measurement Period and implementation of benefits. 90 days maximum.

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Stability Period: This is the coverage "lock-in" period for employees identified by the system as full-time (based on the results from the Measurement Period). Must be 6-12 months long.

In this panel, you can configure these periods for both new and existing employees.

Procedure

To configure look-back and eligibility periods on the system level:

Specify the number of Months or Days in the Measurement Period. For Ongoing Employees, specify the period Start Month/Day.

Specify the number of Months or Days in the Administration Period, and indicate whether the period Starts First of the Month.

Specify the number of Months or Days in the Stability Period.

Indicate the Break-In Service Term. This field specifies maximum number of weeks (default is 13) where the employee is not employed but remains eligible for healthcare if they are rehired. After this period, the system counts the employee as "starting new" instead of as ongoing. For example, you might enter 26 weeks for an educational institution.