With the ACA recording deadlines rapidly approaching, many employers are looking to put the finishing touches on their reporting plan for the year. Changes abound this year, especially for those employers soon to be defined as applicable large employers (ALE), those with 51-99 full-time employees or full time equivalents.
Will you be affected? If so, it is imperative to have a reporting plan in place and your information easily accessible. To help employers prepare, Brittenford recently hosted a survey and webcast to answer any questions employers may have.
Available for download here, ACA Readiness Checklist featured Ted Trevorrow, Certified Health Insurance Navigator and ACA expert, Hartmuth Csandi-Schwartz, Director of Business Operations of a Maryland-based association and Keith Schmidt, Account Executive at Integrity Data to share common challenges, insights, and success stories surrounding ACA reporting and data availability.
ACA Changes for Tax Year 2015
As the ACA has been implemented in stages, employers are beginning to see the effects of the changes. With fines beginning for tax year 2015, employers must provide affordable, employer-sponsored coverage to 70% of employees this year and 95% in 2016.
Noting this, the Employer Shared Responsibility requirement applies to businesses with 50-99 employees in tax year 2016, but these employers are required to file for 2015 with no fines.
The biggest concern among employers, according to Trevorrow, is the paperwork. Employers understand the basics—W-2, W-4, 1099, and 1040—but will need to make sense of and be able to complete new IRS forms:
- 1094-C: To report summary information for each employer and to transmit form 1095-C to IRS. View IRS 1094-C.
- 1095–C: To report information about each employee. View IRS 1095-C.
These forms are important, not only for the transmission of information, but to allow employers to calculate the amount (if any) an employer owes, and to determine eligibility of employees for premium tax credits.
However, reporting is more complex than that. Although these are annual documents, employers are required to continually track employees’ hours of service (not just paid hours), calculating eligibility, cost, and affordability monthly, filing the reports annually.
For a full breakdown of how a company would complete documents and calculate totals, view the entire ACA reporting compliance webcast.
End User Success: Not-for-Profit Community Service Organization
Among the most confusing aspects for employers is the calculation of full-time equivalents. For companies, nonprofits, or not-for-profits with a wide variety of variable-hour employees, the reporting and paperwork process can be complex and error-prone.
Originally combining payroll and HR reports using Excel, this organization found its measurement process error-prone, cumbersome (20 hours per month), and expensive ($6,000 per year to generate reports), with risk of inconsistencies.
After moving to Integrity Data, a platform that improves upon Microsoft Dynamics GP’s reporting ability; this organization was able to install and test within 45 minutes, generating reports within seconds, not hours, with much more accuracy than previously available.
Learn More: ACA Reporting Checklist
Filing is important. Filing correctly is equally as important. The IRS is prepared to send penalty notices for employers offering no coverage, noncompliant coverage, or those who fail to complete a form.
- Penalty for Offering No Coverage: $173.67 per month per employee
- Penalty for Offering Noncompliant Coverage: $260.50 per month per employee
- Penalty for Failing to File: $500 per required form
With fines significant and not deductible, having a reporting plan in order is a necessity no matter who you are. To learn more, including the overall results of the case study above, the entirety of the webcast is available for download here.