The ACA is complicated enough. Don't add unnecessary penalties.
Confused about the Affordable Care Act and whether or not your business is subject to "pay or play" penalties? You're not alone. The ACA has been a work in progress since its inception and had many rule changes and modified deadline announcements. Keeping the rules straight and complying with the ACA without adequate staffing can leave you overwhelmed when trying to remember which forms to file and when. These forms are what the IRS uses to determine if your business is subject to the "pay or play" penalties for not offering adequate health coverage, so filing correctly can save you time and money.
Eide Bailly has taken a lead role in working with employers on ACA compliance. Our team has the experience and knowledge to help you every step of the way. Our health care reform specialists can give you a better understanding of the requirements and can assist you in filing—whether you're an applicable large employer or a small business with a self-funded insurance plan.
Specifically, we help clients:
The IRS has started sending out Letter 5699s over the last year asking some employers where their ACA forms are. It’s better to file late forms as soon as possible to try to ward off these notices. We often see clients miscalculate the FTEE (full-time equivalent employee) number because the hours threshold is different than what the rest of the regulations state for a FT (full-time) employee. If the calculation is done incorrectly, it could tell the employer that they are a small employer, i.e. 49.99 FTEEs, and therefore not an ALE that has a filing requirement. If forms are not filed when they should have been, the penalties are severe, increasing to $270 per form in 2019. The IRS can double this penalty if there is intentional disregard for the rules.
All employers, regardless of size, have a filing requirement if they have a self-funded plan. In addition, employers who are applicable large employers (ALEs), have a filing requirement regardless if they offer insurance or do not offer insurance. Small employers with self-funded plans file forms 1094-B and 1095-B, whereas large employers file forms 1094-C and 1095-C. Large employers that have self-funded plans put additional information on form 1095-C to report the months of coverage. There is a huge misconception that these forms are not required after 2018. While the individual mandate is gone, the employer mandate is still very much alive.
The non-filing penalties are listed above. The employer mandate penalties have increased to $2,500 and $3,750. If an ALE doesn’t offer affordable and adequate insurance to 95% of their FT employees and a FT employee gets a premium tax credit, the company will pay a penalty of $2,500 on every FT employee, less the first 30 FT employees. If the employer offers insurance but it’s unaffordable to an employee who goes to the Exchange and receives a premium tax credit, the employer will pay $3,750, but only on that one employee, not the entire FT workforce.
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Get Your ACA compliance questions answered during our NEW ACA roundtables.
Complying with the Affordable Care Act continues to be a challenge for many businesses. Whether it’s being unaware of filing obligations, new and changing regulations, or untimely or incorrect completion of forms, there are many ways companies can leave themselves at risk for large penalties.
Our NEW pilot roundtables will provide you access to accurate and timely information and provide the opportunity to get your burning ACA compliance questions answered by one of the country’s leading ACA professionals.