Discussions regarding the future of the Affordable Care Act continue, but notifications and filing requirements to comply remain in place. Businesses must keep ACA compliance on their radar to avoid costly penalties.
Below are some ACA considerations:
- All employers are affected by the ACA, yes, even small employers. Small employers do not have a 1095 filing requirement, however, there are penalties for not adhering to the market reforms. In addition, small employers with self-insured plans have a filing requirement.
- All ALEs (Applicable Large Employers), employers with 50 or more full-time equivalent employees, have a filing requirement on form 1095-C. There's a misconception that insurance companies are filing these forms for them. The insurance companies are filing forms 1095-B for fully insured plans, not the 1095-C forms.
- Penalties for filing incorrect forms for 2017 are $260 per form and $530 per form if there is intentional disregard for the rules.
- Employers need to continue watching for controlled group issues. Often companies think they are not an ALE because they inadvertently omit their related entities.
- As of September 7, 2017, there is not a filing extension. Therefore, the due date to give employers their form is January 31, 2018, and February 28, 2018, to mail forms to the IRS. If e-filing the forms to the IRS, the due date is March 31, 2018.
- There are rehiring rules that are often overlooked. Under the lookback measurement rules, if an employee is rehired within 13 weeks, they need to be treated the same as they had been when they terminated. For educational institutions, the rule is 26 weeks.
- Employers cannot reimburse for individual health insurance. This is a $100/day/person nondeductible excise tax penalty and should be stopped immediately. There is an exception to plans that have "less than two" employees.
- The IRS will be sending out notices in 2017 for 2015 1095 forms. Be careful of fraudulent notices.
- Responding accurately to Marketplace notices is important. Remember the IRS is the "gatekeeper" for the ACA penalties, but the Marketplaces will send out notices to verify information on employees that qualified for a subsidy.
Please contact your Eide Bailly professional or a member of our health care reform team
with questions. We look forward to helping you make an informed decision and to comply with the ACA.