Thanksgiving is almost here, which means the grocery stores are stocked to the brim with turkey. You can roast it, deep fry it, or save it for leftover sandwiches – but you don’t want to be it. Unfortunately, if you mess up on ACA compliance issues, you might spend Thanksgiving feeling like a turkey.
Don’t be a turkey. Avoid these fowl mistakes.
Thinking the ACA Is Dead
The individual mandate penalty has been repealed, meaning that individuals who don’t maintain health insurance coverage no longer have to pay a federal penalty starting with plan year 2019, but the employer mandate is alive and well – at least for now. As Kaiser Family Foundation explains here, the ACA is being challenged in Texas v. U.S. This case could have far-reaching implications for the ACA.
However, for the moment, the ACA is still the law. This means that employers still have to comply with the employer mandate and ACA reporting requirements, and they may still face penalties for failing to comply.
Getting the Math Wrong
Complying with the ACA can require a lot of math. For example:
- You have to calculate whether you’re an Applicable Large Employer (ALE). The ACA requirements apply to ALEs, or companies with at least 50 full-time employees. Counting employees may sound easy, but it gets more complicated when you realize that you also have to count full-time equivalent employees, and you have to look at the average for the prior year.
- You have to calculate full-time status. Under the ACA, a full-time employee is an employee with an average of 30 service hours per week or 130 service hours per month. This requires careful tracking, and it can get especially complicated when you have employees who work on-call hours or have other special circumstances.
- You have to calculate health coverage affordability. If an employer offers health insurance that does not meet the affordability requirement, and if an employee opts for a Marketplace plan and receives premium tax credits, the employer can be on the hook for the shared responsibility payment.
Not Filing Forms on Time
Employers have to file Forms 1095 and 1094, and they have to do so on time. Otherwise, they can face seep penalties. Failing to file a return can result in hefty IRS fines for Applicable Large Employers. When the ACA took effect, these fines were $100 each but they increased significantly after December 31, 2015:
- For returns required to be filed after December 31, 2015, the penalty for failure to file an information return generally is increased from $100 to $270 for each return for which such failure occurs. The total penalty imposed for all failures during a calendar year after December 15, 2015 cannot exceed $3,275,500.
- The penalty for failure to provide a correct payee statement is increased from $100 to $270 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,275,500. The increased penalty amount applies to statements required to be provided after December 31, 2015.
But these mistakes are just the beginning. If you can avoid 10 common ACA compliance mistakes, you’ll have one more thing to be thankful for this Thanksgiving. Download the ACA Fowl Play guide today.
And remember, Travisoft’s Total ACA Toolset makes compliance much easier, and allows you to easily generate Forms 1094 and 1095. Our new pricing structure makes this tool an easy decision. Contact us to learn more.