The Affordable Care Act (ACA) employer mandates and deadlines are putting plenty of fear, worry and doubt into businesses who must meet the ACA requirements. Applicable Large Employers (ALEs) should be especially aware of their ACA requirements, which have both employee and IRS components.
Since the ACA became law, the IRS has managed over 40 provisions regarding implementation of ACA.
Perhaps the most pressing from an employer’s view point is play or pay. Large employers (50+ FTEs) who do not offer coverage for all of their full-time employees, offer unaffordable minimum essential coverage or offer plans with high out-of-pocket costs could face tax penalties.
The employer would also be subject to a tax penalty if there is at least one full-time employee certified as having purchased health insurance through an exchange and was eligible for a tax credit or subsidy.
Employer fines imposed for ACA non-compliance are referred to as employer shared responsibility payments. The full details of who will have to pay, how much to pay and under what circumstances is pretty complicated, but rest assured those fines can be substantial. The IRS official Q&A about this contained 56 entries when it was updated as of May 20, 2015.
ALEs should have been recording and compiling detailed, monthly information as of January 1, 2015, in order to meet filing requirements. Some of this required data includes:
Required reporting will be done via four IRS forms:
ALEs will file Forms 1094-C and 1095-C, while the coverage provider (or self-insured plan sponsor) has the legal obligation to furnish forms 1094-B and 1095-B to the plan participants.
Full-time equivalent (FTE) employees must receive their completed forms by March 2, 2017 (due to an extension granted on Nov 18th, 2016) to give employers additional time to gather and analyze the information [necessary to] prepare the 2016 Forms 1095-C and 1095-B to be furnished to individuals.
The IRS did not change the deadline for filing Forms 1094 and 1095 with the agency. This means there will be no extension to file the 2016 Form 1094-B (Transmittal of Health Coverage Information Returns) along with copies of Form 1095-B, and Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) along with copies of Form 1095-C. Those deadlines remain in place:
Feb. 28, 2017 (for paper filing)
March 31, 2017 (for electronic filing)
iSolved HCM is one such system that can generate the required forms and do the filing for your organization.
The challenges of ACA compliance can be met with the right solution that manages employee data, time and attendance, HR, payroll and benefits so that an employer is able to quickly review data. If you use outside assistance, make sure they provide a defined project plan to ensure your compliance.
Your Game Plan:
The bottom line? Be ready – you have to comply!
You might also find this article on the ACA update helpful.
MassPay provides a cloud-based Human Capital Management (HCM) solution called iSolved, which allows small to mid-sized businesses to utilize technology to streamline their HR, Payroll and Time & Attendance processes and optimize their workforce. iSolved tracks detailed employee information, administers benefits, calculates work hours and processes payroll, and offers performance management/reviews, new hire onboarding, employee self-service and other capabilities, to keep businesses running efficiently, and stay compliant, with ACA and other labor regulations.
MassPay also offers ASO services to provide businesses with guidance on HR/Payroll issues, helps them set strategy for company policies, addresses compliance issues, and implements best practices in the areas of hiring, on-boarding, training and performance, to help businesses optimize their workforces.
Contact us to learn more!