While the future of the Affordable Care Act is still unknown, businesses must keep ACA compliance on their radar to avoid penalties. While discussions continue, it is important to keep the below considerations in mind:
- All employers are affected by the ACA, including small employers. Although small employers do not have a 1095 filing requirement, there are penalties for not adhering to the market reforms. Small employers with self-insurance plans have a filing requirement as well.
- All Applicable Large Employers (ALEs) – employers with 50 or more full-time equivalent employees, have a filing requirement of 1095-C. There’s a misconception that insurance companies are filing these forms for them. Insurance companies are filing forms 1095-B for fully insured plans, it is the employer responsibility to file 1095-C forms.
- Penalties for filing incorrect forms for 2017 are $260 per form and $530 per form if there is intentional disregard for the rules.
- Employers must continue looking for controlled group issues. Companies often think they are not an ALE because they inadvertently omit their related entities.
- As of September 7, 2017, there is not a filing extension. The due date to give employees their form is January 31, 2018, and February 28, 2018 to mail forms to the IRS. If e-filing the forms to the IRS, the due date is March 31, 2018.
- There are rehiring rules that often go unnoticed. Under the lookback measurement rules, if an employee is rehired within 13 weeks, they need to be treated the same as they had been when they terminated.
- Employers cannot reimburse for individual health insurance. This is a $100/day/person nondeductible excise tax penalty and should be stopped immediately. There is an exception to plans that have “less than two” employees.
- Be aware of fraudulent notices. The IRS will be sending out notices in 2017 for 2015 1095 forms.
- Responding accurately to Marketplace notices is important. Remember the IRS is the “gatekeeper” for the ACA penalties, but the Marketplaces will send out notices to verify information on employees that qualified for the subsidy.
We will continue to keep you abreast of healthcare reform updates. Please contact us with questions.
