Get your ACA practices in order before it’s too late
With tax season and last year’s Affordable Care Act (ACA) deadlines in the rear view mirror, you may be tempted to take a break from employee tracking. But if the ACA penalty letters currently being assessed by the IRS aren’t enough to keep your guard up, perhaps a look at last year’s most common ACA filing mistakes can reinforce the importance of ongoing tracking and compliance.
While this last reporting season was smoother than previous years, many applicable large employers (ALE) still made mistakes. Here are three of the most common struggles employers faced:
- Ensuring affordable coverage. ALEs are required to offer health care plans that meet the minimum essential coverage and affordability standards. But many ALEs still question what actually qualifies as an affordable plan. ALEs with part-time employees had an especially hard time understanding how to provide an affordable plan to employees of that status. Luckily, there are several easy ways to determine if your health plans are affordable.
- Keeping up with changing requirements. To confuse employers even more, Forms 1094-C and 1095-C contained several outdated sections where a specific transition relief or safe harbor no longer exists. For example, on line 22 of the 1094-C form, sections B and C only apply to the 2015 and 2016 filing years. ALEs scrambled to figure out what needed to be filled out for the 2017 filing year, and the answer ended up being nothing. Hopefully, the forms will be updated for next reporting season, but if they’re not, you should note that you do not need to complete these sections.
- Avoiding the last-minute scramble. As with previous filings, many ALEs waited until the last minute to complete and submit their information to the IRS. Some were still banking on the ACA being repealed, while others had HR and payroll complications. For instance, some ALEs were surprised to learn their payroll companies were only gathering minor tracking data and not filing for them. In other cases a company was acquired and didn’t know their ACA employer status had changed. These issues and filing delays could have easily been avoided with better preparation and earlier, ongoing attention to your ACA obligations.
2018 and beyond
With these mistakes in mind and an eye toward 2018 reporting, the most important piece of advice we have is to understand how hiring decisions and employer status affect your filing requirements. Mistakenly marking a part-time or seasonal employee as full-time upon hiring will flag that employee as requiring a 1095-C form. We’ve seen ALEs receive 6,000 forms when they actually only need 800.
Even though filing deadlines are quite a while away, knowing your ACA status and staying on top of employee tracking throughout the year will set employers up for filing success. Take advantage of these quieter months to assess your reporting and compliance practices and make adjustments now to avoid common mistakes when the 2018 reporting deadlines roll around.