Three ACA things Applicable Large Employers should be doing before December 31st
This post is for Applicable Large Employers (ALEs) required to comply with the Affordable Care Act. The following was written by Adam Miller, Passport Software’s ACA Specialist and HR Compliance Manager. We hope you find it useful.
As the seventh filing season of Affordable Care Act is just three months away, here are the steps you should be crossing off your to-do list before year-end.
Affordable Offers of Coverage
1. Identifying full-time employees and making timely and affordable offers of coverage to them.
Anyone who is hired with the “reasonable expectation” of working full-time hours should be offered affordable coverage within 90 days. Employees who average 130+ hours per month over a pre-defined measurement period must also be offered coverage.
“Affordable” is defined as less than 9.83% of their income. Coverage must also be offered to the spouse and any dependents of these employees, though that additional premium does not need to meet any affordability standards.
Tracking ACA-related Data
2. Recording contribution amounts and coding for offers and enrollment, either in your ACA software or
on spreadsheets. Comprehensive ACA compliance software helps streamline the tracking of ACA-related data throughout the year.
Lines 14, 15, and 16 are the monthly-value “meat” of the 1095-C reporting form. On Line 14, 1H translates to “no offer”. There are perfectly valid reasons to use this. That month could be before or after their term of employment. The soon-to-be Full Time employee may be in that initial 90-day window. Or the employee may not have completed the measurement period. If the employee has been offered coverage, 1E is the most common code and means that coverage was also available to the employee’s spouse and dependents (if they exist).
Note that you may still use this code for single/childless employees, which simplifies things. The contribution amount on Line 15 is a hypothetical value. It is the employee’s share of the cheapest qualifying, self-only plan available to them. You would still use this value even if the employee opts for a more comprehensive plan or one which includes additional family members. Ideally, this amount is the same for all your employees.
Line 16 asks “What was the result of Line 14?” When that Line 14 value was 1E or another compliant offer code, most Line 16 “answers” will be 2C (if the employee enrolled) or 2F/2G/2H if the employee waived. 2F/2G/2H mean the same thing, the only difference is that the company is declaring which of the three permissible methods they are using to estimate the employee’s income.
You can use a 40-50 column spreadsheet to organize, but ACA software will reduce much of the duplication. A premier ACA software option will even provide time-saving tools to help you efficiently generate and mass update these codes and contributions.
Prepare to File
3. Preparations for filing. For electronic filers, this means registering with the IRS’s E-Services.
Electronic filing is required for employers with 250 or more forms. While e-filing is not required for smaller ALEs, it is an attractive option. Uploading the 1094-C and 1095-Cs to the IRS portal is quick and simple. Registering for it is…less so. Allow up to 4-6 weeks for you and the other required company representatives to complete all stages of the application process. There are third party companies who will transmit on your behalf.
Passport is an IRS-certified proxy filer and offers that service even if you haven’t used our ACA software or ACA Full Service option.
Professional Source of ACA Support
Navigating the ACA can feel overwhelming. Another thing to consider to prepare is a professional source of ACA support. The IRS has established penalties for violations of ACA requirements that can be intimidating. No one wants to be the reason their employer now faces thousands of dollars in penalties.
Having a service or contact that can help you take steps that will avoid penalties, assist you to simplify your ACA record-keeping, and be there if questions or concerns come up can reduce your overall stress level at the end of the year. Make that arrangement before the year-end traffic begins to escalate, otherwise, it ends up being just one more item on your already over-long to-do list.
Our US-based customer service is friendly and knowledgeable. We have been working to assist large and small companies make their way through ACA compliance for 7 years. Many of our clients have been with us for those 7 years. We can help you to use our affordable ACA software or we can manage your compliance for you with our Full Service option.