No matter your candidate of choice for this year’s election, one thing remains certain—you must plan for 2016 Affordable Care Act compliance, regardless.
Change never comes quickly in government, and no matter who the successful candidate is for this election, ACA compliance will continue to be a big part of your human resources agenda in 2017. To repeal the ACA would require Congress to step up for this change. While new regulations could be issued under a new president, this will, most likely, require a notice and comment period that could be more than a year in itself — well beyond the election. So, go with the flow and start preparing to insure that your team avoids penalties.
Some questions and answers that may prove useful:
What is the employer mandate? Applicable Large Employers (ALEs) must offer health insurance that is affordable and provides minimum value to 95% of their full-time employees and their children up to age 26, or be subject to penalties. This is known as the employer mandate. It applies to employers with 50 or more full-time employees, and/or full-time equivalents (FTE). The employer-shared responsibility provisions are sometimes referred to as “the employer mandate” or “the pay or play provisions.”
If two or more related companies together are an Applicable Large Employer (ALE) under section 4980H, how do they comply with the information reporting requirements? Each ALE member must file Form 1094-C (or a substitute form) with the IRS and furnish Form 1095-C (or a substitute statement) to its full-time employees, using its own Employer Identification Number (EIN) by the federally mandated deadlines.
How expensive can a penalty get? Form-related failures, which may be due to incorrect information or a failure to submit filings before the deadline, among other reasons, will result in penalties up to $260 per return, with a maximum annual penalty of $3,193,000. The IRS can assess this penalty twice for each full-time employee — once if the statement is not provided to the employee, and another time if the statement is not filed with the IRS. The penalty for intentionally disregarding to file falls under a special rule designed for increased penalties. Good faith efforts are not going to work this year. Accuracy, for obvious reasons, is important.
When is the best time to start preparing for the 1094/1095 filings? The end of the calendar year marks the end of the 2016 data collection cycle and the preparation should start immediately, if not already. The PSST ACA-Track™ platform assists in organizing all your data inputs for easy access and necessary views.
How do I avoid common mistakes?
- Do confirm that dates are accurate in HRIS (Human Resource Information System) and FM (financial management) systems.
- Do sync up payroll, human resources, and benefits data across divisions for proper data collection and aggregation.
- Do ensure dates coincide with coverage actions (like termination). The term date must be utilized in the system for accurate reporting.
- And, do ensure that health insurance deduction records are not deleted.
All companies with more than 50 full-time employees can be prepared for the 2016 filing if they start today, or have been using a software platform to track and review. The 2016 election results cannot get your company out of this process. The president is sworn in on Friday, Jan. 20, 2017; the forms are due on Jan. 31, 2017. You must move toward preparation now.
Looking for a reporting solution for 2016 for your company or clients? Click here to request a no-obligation demonstration of ACA-Track, a seamless solution for Affordable Care Act compliance and reporting.
Why outsource and use ACA-Track? With ACA-Track, monthly reports run automatically and are user-friendly. This “Snapshot” system, along with ACA-Track’s 1095/1094 fulfillment options, simplified data loading process, and a dedicated account representative for questions and assistance, make it a comprehensive and confident solution to ACA tracking and reporting.