How ACA Compliance Affects Your Business’s Bottom Line
As businesses continue to navigate the complexities of healthcare regulations, one of the most significant laws impacting employers is the Affordable Care Act (ACA). The ACA, while designed to provide affordable health insurance options for employees, also imposes specific requirements on employers, particularly Applicable Large Employers (ALEs). Noncompliance can result in substantial penalties, which can severely affect your business’s bottom line. In this post, we’ll dive into the essential aspects of ACA compliance and discuss how ACA-Track can help businesses streamline their compliance efforts, safeguarding their finances and reputation.
What Is ACA Compliance and Why Does It Matter?
The Affordable Care Act (ACA) mandates that certain employers—specifically those classified as Applicable Large Employers (ALEs)—offer health insurance coverage to their full-time employees. The goal is to ensure that employees have access to affordable healthcare, which not only improves their health but also boosts their productivity and reduces absenteeism.
But what happens if a company fails to comply with ACA regulations? Penalties can be severe. Noncompliance could result in hefty fines, penalties, and potentially the loss of business opportunities. For ALEs, understanding and managing these compliance requirements is crucial, both for avoiding costly penalties and for fostering a healthier, more engaged workforce.
ACA-Track, a proven ACA compliance solution, provides a comprehensive approach to tracking employee hours, ensuring accurate reporting, and addressing errors, which is essential for reducing your risk of penalties.
The Role of ACA-Track in Ensuring Compliance
ACA-Track offers businesses a streamlined, effective solution to manage ACA compliance. With services ranging from monthly line code audits to variable hour tracking, ACA-Track ensures that businesses are fully compliant with ACA regulations while also providing cost-effective pricing plans tailored to meet the needs of organizations of all sizes. Let’s explore some of the key services ACA-Track provides to help businesses stay compliant:
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ACA 1095 C Monthly Line Code Audits
ACA-Track conducts monthly audits to ensure that line codes on Forms 1095-C, used for ACA reporting, are accurate. This is essential because incorrect reporting can lead to penalties from the IRS. ACA-Track identifies and fixes errors, ensuring that you meet reporting requirements without mistakes. -
Variable Hour Tracking of Employees
For businesses with variable hour employees—such as part-time or seasonal workers—tracking actual hours worked is essential to determining eligibility for health insurance. ACA-Track tracks these hours, helping you avoid penalties for failing to offer insurance to eligible employees. It’s crucial to know whether a worker averages 30 hours per week or 130 hours per month, which is the threshold for ACA eligibility. -
1094 C & 1095 C Federal and State Reporting
ACA-Track simplifies the process of filing the necessary IRS forms (1094-C and 1095-C) for both federal and state reporting. These forms are required annually, and failure to submit them on time can result in penalties. ACA-Track ensures the forms are filed electronically, accurately, and on time, reducing your risk of fines. -
Electronic Filing with the IRS
Filing Forms 1094 and 1095 electronically is mandatory for businesses with 250 or more employees. ACA-Track handles this for you by filing the necessary XML file with the IRS, ensuring your reports are compliant with the ACA’s filing requirements. -
Fix ACA Reporting Errors
If errors are identified during the reporting process, ACA-Track helps correct them quickly and efficiently. Error correction is crucial to ensure compliance and avoid penalties, which can add up quickly if not addressed promptly.
How ACA Compliance Affects Your Business’s Bottom Line
Failure to comply with ACA regulations can lead to costly penalties that negatively impact your bottom line. Let’s explore some of the specific financial risks associated with noncompliance:
1. Employer Shared Responsibility Payment
Under the ACA, if an ALE fails to offer affordable, minimum value coverage to its full-time employees, it could be subject to an “Employer Shared Responsibility Payment.” This penalty is calculated based on the number of full-time employees who do not receive health insurance coverage or receive coverage that is unaffordable. The fine can be as high as $2,000 per full-time employee, excluding the first 30 employees, and up to $3,000 per employee who seeks coverage through a Health Insurance Marketplace.
2. Late Filing Penalties
Employers who fail to file Forms 1095-C and 1094-C by the IRS deadline will incur penalties. These penalties can range from $50 per form if filed within 30 days of the deadline, to $270 per form if filed after August 1. The maximum penalty for these late filings can reach up to $1,113,000, making timely filing crucial to your financial stability.
3. Incorrect Reporting
Incorrect information on ACA forms can also lead to penalties, especially if the IRS identifies discrepancies in coverage information or employee eligibility. If your company has not properly tracked employee hours or insurance offers, you could face additional fines for failing to provide accurate and timely reporting.
The Benefits of ACA-Track’s Comprehensive Services
By utilizing ACA-Track for your ACA compliance needs, you can avoid the risks associated with incorrect or late filings. Here’s how ACA-Track helps your business save money in the long run:
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Accurate Reporting: ACA-Track ensures that your forms are completed correctly and filed on time, reducing the risk of penalties for incorrect or late submissions.
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Proactive Monitoring: The system alerts you when employees reach eligibility thresholds, helping you stay ahead of compliance requirements.
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Audit-Ready Records: In the event of an IRS audit, ACA-Track maintains all employee ACA data in one location, simplifying the process of retrieving necessary documents.
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Dedicated Support: With a dedicated Client Success Advisor, ACA-Track provides personalized support to make ACA compliance easy, helping you stay on top of deadlines and reporting requirements.
What Happens If You Don’t Track Part-Time or Variable Hour Employees?
Tracking the hours of part-time or variable hour employees is crucial for determining whether they are eligible for health coverage under the ACA. If your company fails to track the actual hours worked by these employees, you risk noncompliance. If a part-time employee seeks coverage through the Health Insurance Marketplace, and your company should have offered them coverage, you could be subject to significant penalties.
ACA-Track ensures accurate tracking of all employees, including those with variable hours, so you can avoid penalties and stay compliant with the law.
How ACA-Track’s Security Ensures Peace of Mind
ACA-Track is not only user-friendly but also secure. The platform’s cloud-based data center is SAS 70 certified and follows stringent data security protocols to protect sensitive employee information. Personal identifying data is encrypted, and all data transfers are conducted via secure HTTPS, ensuring that your business and employees are protected from potential data breaches.
Final Thoughts
ACA compliance can be a daunting task for businesses, but it doesn’t have to be. ACA-Track offers a comprehensive, user-friendly solution to help you track employee hours, manage eligibility, and submit accurate ACA reports. By taking the stress out of ACA compliance, ACA-Track allows you to focus on what really matters—growing your business and taking care of your employees.
Don’t let noncompliance with the ACA impact your bottom line. Learn more about how ACA-Track can streamline your compliance efforts and protect your business by visiting ACA-Track. Let ACA-Track be your trusted partner in navigating the complexities of ACA compliance.
