Poor ACA Compliance Can Hit Your Bottom Line

 

image of paper with lists of dollar amounts and someone is holding a pen on the paper. A calculator also lies on the paper

Are you ready for Affordable Care Act 2016 reporting requirements? We have a few suggestions on how you can handle it this year and keep penalties affecting your bottom line.

Last year, almost 80% of ACA reporting filers had issues that required corrections. If you were one of them, you’re fully aware that those corrections could result in some expensive penalties.

Eighty percent. That is a huge portion of businesses who have said they are struggling with these new requirements.

And more changes are on the horizon. We want to make sure you’re ready for 2016 reporting requirements. Don’t make the mistake in assuming it’ll be just like 2015, even if you didn’t have any issues last year.  

Don’t Let Compliance Get You Down

In 2015, we at least had the graces of extended deadlines, a “good faith effort” safe harbor, and transition relief to ease the burden.

2016 begins the second year for mandatory reporting requirements for employers who have 50 or more full-time equivalent (FTE) employees. This year, there are no extended deadlines, “good faith effort” safe harbors, or significant transition relief. Bummer, we know…

Before we get into your options, let’s define FTE.

What is an FTE?

Your FTE count is the number of full-time equivalent employees working within your business during any given month. It is a pool of employees who might not be individually full-time (working 40+ hours a week), but who are equivalent to a full-time employee when combined. You can determine your number of FTEs by;

  1. Combining the number of hours for all non-full-time employees in a given month, then
  2. Divide that total number of hours by 120.
  3. You will be left with your number of full-time equivalent employees.

What Are Your Options This Year?

So, if you are an employer with 50 or more FTEs, the 1095c report is required for each individual FTE for any month in the calendar year, and 1094c is required as the transmittal summary for all 1095c forms filed.

We believe you have a few options to choose from to deal with this year’s reporting requirements.

  1. You could file yourself. If you are a client of Employers Resource, we will provide you the basic demographic and payroll information as it relates to hire dates, waiting periods, full-time or part-time status changes and termination dates for each employee. Then, you would take this information and marry it with enrollment information provided by your health insurance carrier to complete the forms yourself. As a client, we would provide you this information at no extra charge. However, if you are not a client, you would need to collect the above information through your human resources staff and carry forward.
  2. Or, if you are a client of ours, Employers Resource will complete the forms 1094c for you to file and we will also complete the 1095c for each employee and mail them out accordingly. If you choose this option, we will provide you with a service agreement including all specific information including an estimated cost for us to file for you.
  3. You could ignore the reporting requirements. However, we do not recommend this because penalties for not filing could result in some hefty fines.

By now, you’re aware that poor compliance or disregarding this year’s reporting requirements would result in bad news for your bottom line. Hopefully, this information has helped you and your HR staff feel ready to take on the coming year and the ACA responsibilities that come with it. If you have any questions or would like to speak to us about our ACA assistance, please contact us anytime.

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