ACA Compliance
ALE Guard™ A-B
Penalty A & B Compliance Bundle — complete ACA Employer Mandate compliance solution with MEC + Minimum Value Plan (MVP), designed to address ACA §4980H(a) and §4980H(b) exposure, even when no employees enroll.
ALE Guard™ AB
Penalty A & B Compliance
ACA Penalty A & B Compliance — Even With No Employee Enrollment
ALE Guard™ AB is specifically designed for Applicable Large Employers (ALEs) with very low or no employee participation seeking to address both major ACA Employer Shared Responsibility requirements under IRC §4980H(a) and §4980H(b).
The program combines Minimum Essential Coverage (MEC) with a Minimum Value Plan (MVP), providing employers with an integrated strategy designed to address both:
- Penalty A (§4980H(a)) — the requirement to offer Minimum Essential Coverage to substantially all eligible full-time employees and their dependents.
- Penalty B (§4980H(b)) — potential penalties when an eligible full-time employee is not offered coverage that provides Minimum Value and meets applicable affordability requirements.
What Makes ALE Guard™ AB Different?
Many traditional ACA compliance programs require a minimum number of employees to actually enroll for the plans to remain active. This can create a significant challenge for employers that make coverage available but experience very low—or no—employee enrollment.
The key difference between ALE Guard™ AB and other ACA compliance programs is that ALE Guard™ AB is designed to remain active even when no employees enroll.
Rather than depending entirely on employee participation, ALE Guard™ AB uses 15 Compliance Units (“ghost lives”) to satisfy the program’s minimum enrollment requirement. This keeps both the MEC and Minimum Value Plan available for bona fide offers of coverage throughout the year, even when employees decline coverage.
How Compliance Units Work
Each Compliance Unit costs $85 per month.
With no employees enrolled:
15 Compliance Units × $85 = $1,275 per month
This allows an employer to maintain both components of the ALE Guard™ AB program without requiring employees to enroll simply to satisfy the program's minimum participation requirement.
As employees elect coverage, Compliance Units are replaced by actual employee enrollments. For example, if five employees enroll, those five enrollments replace five Compliance Units, leaving 10 Compliance Units required to maintain the minimum enrollment level.
One Program Addressing Penalty A & Penalty B
ALE Guard™ AB goes beyond a traditional MEC-only strategy by combining two levels of coverage within one compliance framework.
The MEC component is designed to support the employer's offer-of-coverage requirements associated with Penalty A, while the Minimum Value Plan provides an option designed to address Minimum Value requirements associated with Penalty B.
This bundled structure gives employers a broader ACA compliance strategy while preserving the ability to maintain the program when employee participation is extremely low.
Designed for Low and No Participation
ALE Guard™ AB is particularly well suited for ALEs that:
- Experience very low or no employee enrollment
- Want to address both Penalty A and Penalty B exposure
- Need to make MEC and Minimum Value coverage available to eligible employees
- Have employees who frequently waive employer-sponsored coverage
- Want both plans to remain available regardless of initial participation
- Need a predictable structure for maintaining minimum enrollment requirements
The defining advantage of ALE Guard™ AB is simple: the program does not depend on employees enrolling in order to remain active. Fifteen Compliance Units allow an ALE with no employee enrollment to maintain both the MEC and Minimum Value components for $1,275 per month, providing a practical framework for making bona fide offers of coverage while addressing potential §4980H(a) Penalty A and §4980H(b) Penalty B exposure.
No Employee Enrollment Required
Remains active even when no employees enroll.
15 Compliance Units
Keeps both the MEC and Minimum Value Plan open for bona fide offers year-round.
$85 Per Compliance Unit
Just $1,275 per month with no employee enrollment.
How it works
How the Bundle Works
Under the ACA Employer Mandate, Applicable Large Employers generally must offer qualifying health coverage to substantially all full-time employees and dependents. The Penalty A & B Compliance Bundle addresses both components of ACA compliance:
MEC Coverage — Penalty A
The MEC component is designed to help employers satisfy the ACA requirement to offer Minimum Essential Coverage to substantially all full-time employees. MEC focuses on ensuring eligible employees have access to qualifying coverage and that the employer maintains a documented offer-of-coverage process.
MVP Coverage — Penalty B
The Minimum Value Plan (MVP) component is designed to provide coverage that meets ACA minimum value standards and supports affordability compliance when properly structured. Pairing MEC with MVP creates a broader compliance solution designed to address potential exposure under both penalty categories.
Who it's for
Designed for Low-Participation Employers
Many ALEs face ACA compliance challenges because employees may:
- Employees decline employer-sponsored coverage
- Employees obtain coverage through a spouse or other source
- Limited interest in offered benefits
- Seasonal or variable workforce
- Inconsistent enrollment patterns
The Penalty A & B Compliance Bundle provides a structured approach that allows employers to maintain required plan availability while accommodating workforce participation challenges.
Advantages
Financial, Operational & Risk Advantages
Financial & Compliance
- Address both ACA penalty categories — IRC §4980H(a) (failure to offer coverage) and §4980H(b) (unaffordable or insufficient coverage)
- Cost-effective ACA compliance strategy without requiring a traditional fully insured major medical plan for all employees
- Predictable compliance costs with defined plan structures and controlled benefit spend
- Reduced regulatory risk through a consistent compliance framework and documented coverage availability
- Flexible participation management that maintains compliance readiness even at lower enrollment levels
Operational
- Simplified ACA administration through one coordinated MEC + MVP strategy
- Improved documentation and recordkeeping — eligibility, enrollment, offer records, and ACA reporting data
- Scalable for ALEs with multiple locations, diverse populations, and changing workforce needs
- Integrates with MECMax™, MECFlex™, LevelMax™, and LevelFlex™ strategies
- Consistent workflows for offer, enrollment, and communications across worksites
Risk Management
- Comprehensive ACA protection addressing both offer-of-coverage and minimum value considerations
- Maintains coverage availability throughout the plan year regardless of participation levels
- Supports workforce flexibility for variable-hour, seasonal, high-turnover, and distributed workforces
- Helps avoid unexpected ACA liability by proactively establishing compliant coverage offerings
- Coordinated framework reduces gaps between MEC offer requirements and minimum value standards
Integration
Integration With Existing Benefit Strategies
The Penalty A & B Compliance Bundle can complement broader employer benefit approaches:
Penalty A & B Compliance Bundle — FAQs
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ALE Guard™ AB Application
For Applicable Large Employers combining Minimum Essential Coverage (MEC) with a Minimum Value Plan (MVP) to address ACA §4980H(a) and §4980H(b) exposure.
How ALE Guard™ AB works
ALE Guard™ AB begins with a minimum of 15 MEC Compliance Units (“Ghost Lives”) at $85 per unit per month — $1,275 per month total. This allows an Applicable Large Employer to establish the program and keep both the MEC and Minimum Value Plan available for bona fide offers year-round, even when no employees initially enroll.
- Remains active even when no employees enroll
- 15 Compliance Units keep both plans open for bona fide offers year-round
- $85 per Compliance Unit — $1,275 per month with no employee enrollment
Coverage included: MEC + Minimum Value Plan (MVP) · Addresses IRC §4980H(a) and §4980H(b)
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Compliance Disclosure: ALE Guard™ AB is designed to assist Applicable Large Employers in establishing a framework for addressing potential exposure under IRC §4980H(a) and §4980H(b) through Minimum Essential Coverage (MEC) and a Minimum Value Plan (MVP). Compliance Units satisfy the program's minimum enrollment requirement and are not actual employees or covered individuals. Participation in the program does not guarantee ACA compliance or elimination of Employer Shared Responsibility penalties. Penalty B exposure may also depend on affordability, employee eligibility, the coverage offered, Marketplace premium tax credit eligibility, and other factors. Employers remain responsible for offers of coverage, documentation, reporting, and compliance with applicable law. Employers should consult their legal or tax advisors regarding their specific circumstances.