Are you ready with ACA Compliance for year-end 2015?
October 1, 2015
As business owners and professionals, we know that the end of the year can be a pretty hectic time. Thanks to the Affordable Care Act (ACA), the last part of 2015 promises to be even more chaotic than normal.
Over the past five years, the health care industry has been hit with minor compliance requirements while the more time consuming and invasive aspects of the ACA have been modified and/or delayed. As we near the end of 2015, things appear to be changing.
That’s because the first major tax and compliance aspects of the ACA are scheduled to go into effect. Here is how it is scheduled to play out:
If your organization employs more than 50 employees you are considered an Applicable Large Employer (ALE). That means you will be required to file a 1095-C document for every employee that is eligible for health care coverage at any point in 2015 by early 2016. It doesn’t matter if your organization doesn’t offer coverage as the ACA stipulates that every employee who works at least 30 hours per week or is reasonably expected to work at least 30 hours per week is eligible for health care coverage after 90 days of employment. Therefore, you are required to fill out a 1095-C, which is often referred to as the health care W-2, for each eligible employee. You will also be required to fill out a 1094-C, which is a transmittal form that summarizes the employees who received a 1095-C.
If your organization employs more than 100 employees, you will be subject to the Shared Responsibility provisions of the ACA beginning in 2015. That means that if you don’t offer health care coverage that is both affordable and of minimum value, you face potential fines if at least one employee receives a premium tax credit while buying coverage at the health care exchange, www.healthcare.gov. The 100-employee threshold is a one-year transitional relief rule. So employers who are over 50 (and only had to comply with the 1095-C reporting in 2015) will also be subject to the Shared Responsibility provisions beginning in 2016.
If your organization has fewer than 50 employees, don’t automatically think that you will not be impacted by the ACA. Be sure that common ownership of your organization does not include other entities, which could make it a Control Group and throw it into the ALE category. If your organization offers self-funded health care coverage, you will also have additional reporting responsibilities, even if you are not an ALE.
Employers who pay for health care expenses or premiums on a pre-tax basis for employees may also be impacted by the ACA. That’s because the Market Reform provisions dictate that employers cannot purchase health insurance or reimburse for health insurance on a pre-tax basis. Employers who offer flexible spending accounts without sponsoring group health coverage may also be subject to potential penalties.
This article was previously published in the November 2015 Tri-State Business Times.