Signed into law in 2010, the Affordable Care Act was designed to reduce the number of uninsured individuals in the U.S., as well as reduce health insurance costs for Americans through shared responsibility of the government, employers, and policyholders. While some aspects of the original act have since changed, the employer mandate and its related responsibility are still in effect with specific requirements for providing health care coverage that is both affordable and meets minimum standards, according to the law.

The Complexity of ACA Compliance 

The Affordable Care Act (ACA) brought about substantial changes to the healthcare and employment landscape in the United States. For businesses with 50 or more full-time employees or full-time equivalents, ACA compliance is not optional.

ACA reporting and compliance requirements are complex and navigating the regulations of the law include:

  • Calculating Employee Count: Accurately determining your employee count, including full-time employees and full-time equivalents (FTE).
  • Meeting Affordability and Minimum Value Standards: Ensuring the health coverage offered meets the ACA’s standards for affordability and minimum value while ensuring employees do not face excessive premium costs.
  • Reporting and Documentation: Meeting the annual reporting requirements, including filing the necessary forms with the IRS and providing statements to employees, which is an integral part of ACA compliance.
  • Avoiding Penalties for Non-Compliance: With complicated filing requirements, numerous penalties, and fees calculated on a per-employee basis, non-compliance can get expensive, really fast.

6 Must-Know Facts About ACA

  1. You, the employer are held responsible (not your broker). Many small businesses depend on an insurance broker to help them navigate health care and related coverage. Brokers are a great resource, but the IRS holds the business responsible for compliance.
  2. Penalties are significant and add up quickly.
    With complicated filing requirements, numerous penalties, and assessments applied per employee, non-compliance can get expensive, really fast. Employers who fail to meet the requirements for affordable coverage may be subject to a penalty of $2,880 per FTE With so many intricacies and unique reporting requirements, it’s easy to misinterpret or miss a step on a form. And missteps can be detrimental to your bottom line. Protect your business with on-time filing that’s done right.
  3. The coverage offered must truly be affordable.
    One of the main purposes of ACA is to ensure that health coverage is not only available to employees but made affordable. How is affordability determined? The monthly health care premiums charged to employees cannot exceed 9.12% of an employee’s household income.
  4. 50 Full-Time Employees isn’t as straightforward as it sounds.
    Full-time equivalent (FTE) can be categorized in a variety of ways, such as employees who worked 30 or more hours in one week. But other factors, such as part-time employees who routinely exceed 120 hours per month, could impact the monthly average of FTEs. Employers with a self-insured group health plan need to file for ACA regardless of their employee count.
  5. Eligible employers must meet the requirements and file ACA documents annually
    To demonstrate compliance, ACA information must be filed every year by state and federal deadlines (yes, they’re different in some jurisdictions). Missing the deadlines to both furnish and file ACA information can incur per-employee penalties that increase as time passes. The IRS has eliminated the Good Faith clause for filings, which means it’s even more critical to have your information submitted correctly to avoid ACA penalties. 

Given the complexities and consequences associated with ACA reporting and compliance, seeking expert advice and filing support is crucial. With the support of specialized experts, your business can navigate the ACA landscape with confidence and focus on growing your business.

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