Feeling a bit overwhelmed with the new Affordable Care Act (ACA) reporting? With a new year comes new processes and paperwork -- right? Well, we're here to help. This year marks the first time that the IRS is requiring compliance with ACA reporting and while it can be a daunting change, we're here to make the process easier. The good news is that if you weren't one of the many employers that joined Open Health in 2015, there's still time! If you want to manage your healthcare independently, here's a brief step-by-step to help make sure you are meeting ACA requirements: 1. Identify full-time employees
The first step to compliance is determining your full-time employees. In 2016, companies with 50 or more full-time (those who work a minimum of 30 hours per week or 130 hours per month) or full-time equivalent employees must offer minimum essential coverage to at least 95 percent of these personnel.
Luckily, the IRS has simplified this process and provided a formula that will assist you in determining your total number of full-time equivalent employees. Add up the hours that non-full-time employees are paid during a month and divide the total by 120. Combine the results of each month and the answer is the number of full-time equivalent employees. Add the full-time and full-time equivalent together to determine if you are required to offer health coverage. Keep in mind that this includes union and non-union workers. It is always best to use technology to accurately track employee hours and stay ACA-compliant.
2. Track employer-mandate requirements
Once employees are identified, the next step is to track and document compliance. You want to be sure that you have proof that coverage was offered to all eligible employees. It will also be helpful to keep track of the employees, their hours, the dates that coverage was offered to each employee and when employees may have waived that coverage. Insist that there is a process to track and organize this information in one place throughout the year to make year-end reporting to the IRS easier.
3. Report the cost of employer-sponsored group health plans
It's important to remember that employers are still required to report the value of employee's health care coverage on the employee's W-2 form. There are some exceptions, such as reporting is only required for the non-union employees. When reporting the cost of coverage is required, remember to include the total cost -- both the company's and the employee's contributions. This information should be provided to your payroll service company if you are not the individual responsible for processing W-2's.
4. Educate employees
To put it simply, ACA compliance is confusing for employers and employees. This year, employees will receive new 1095 tax forms from their employer and/or their insurance carrier, and they need to know what to expect. Make it a priority to educate your employees on these new forms and prepare them in advance of filing day. In addition to educating employees on new forms, employers need to provide employees with the correct information about their benefits and coverage. Review the ERISA requirements to provide employees with the right information.
Don't let the new ACA reporting overwhelm you. It's all about being prepared and aware of the always changing paperwork. Open Health makes it easy for you by tracking, reporting and educating! As a reminder, there are no designated open enrollment periods which means that employers can join anytime and it doesn't matter how many employees you have. Call us today to see how we can help make sure you are in compliance!