Your Quick Guide to ACA Compliance

Your Quick Guide to ACA Compliance

The Basics                                                                                                                                                                                              

The Affordable Care Act (ACA) was created to help ensure all people have affordable healthcare Options. Like it or not, your company must be ACA compliant. Althrough TREK is not an ACA compliance attroney, we are here to help answer the questions that employers are concerned about.

Does ACA Apply to my small company?                                                                                                                                  

           If Your Company Had:                                                                                               Then You Need to:

          50 or more full-time employees (or full-time equivalents) in 2014              Comply with ACA requirements however, companies that                                                                                                                                                           had between 50-99 employees in 2014 will not need to pay                                                                                                                                                          penalties.

         More than 100 employees in 2014                                                                          Have been ACA-complaint for 2015 and file the appropriate                                                                                                                                                        tax forms in 2016 to prove that the company were                                                                                                                                                                         compliant.

What is considered full-time for employees?                                                                                                                   

The IRS considers any employee working an average of 30 hours or more per week (or 130 hours each month) full-time. Keep in mind that part time employees’ hours DO factor into how many full-time employees (or equivalents) you have.  If you’re not sure how to determine the number, you can use the calculator to find out!

If I offer healthcare coverage to employees, am I ACA compliant?                                                                      

Not necessarily. The following guidlines must apply to make sure the health insurance you offer is compliant:

 1. Health coverage must provide a certain level of value. An ACA-compliant plan needs to cover at least 60% of an employee’s medical expense.  This should include  hospital and physician benefits.                                                                                                                                  2. Health coverage must be affordable. The coverage you provide can’t cost employees more than 9.5% of their annual household income for an employee only plan.                                                                                                                                                                                                                      3. However, some Safe Harbors exist in case you don’t know all your employees’ household incomes. For more information on how to qualify, Click Here!

What files do I need to file and when?                                                                                                                                 

All companies with more than 50 employees needs to file the 1094-C and 1095-C forms with the IRS. The forms you file with the IRS that shows your company’s healthcare coverage is ACA-complaiant. It must be sent to the IRS by the end of May (for companies with fewer than 250 eligible employees) or June (if filed electronically for companies with more than 250 eligible employees).  This forms gives information about:

  • Your company’s contact and tax information
  • Your ACA tracking and reporting strategy (including if you’re using any Safe Harbors)
  • How many full-time employees you had during the plan year and if they were offered qualifying coverage
  • The type of health coverage offered and who it was offered to
  • The percentage of the premium the employee would have paid if they had employee-only coverage
  • Enrollment, employment status, and certain Safe Harbors were used to calculate affordability

Where do I get these forms to file with the IRS?                                                                                                              

You can download them right here from the IRS website:

                                                  Click Here For:                                                                             Click Here For:                                                                                                                                          1094-C                                                                                              1095-C                                                                                                          

                                                        Form attach photo       Form attach photo

Why do I keep hearing about Section 6055 & 6056?                                                                                                          

Section 6055 & 6056 outline the reporting requirments companies must comply with that were created by the Affordable Care Act (ACA). Section 6055 applies to comapnies that have employees who are self-insured, while Section 6056 applies to companies with at least 50 full-time employees.

These reporting rules help companies know which information they need to report to the IRS and the health coverage they offer to employees. You can review more details of Section 6055 & 6056 on the IRS website.

What is “transitional Relief” and does my company qualify?                                                                                 

According to Section 4980H or Safe Harbor, companies who had 50-99 employees in 2014 may not be subject to penalties in 2016 if they had ALL the following:

  • Average 50-99 full-time employees
  • Don’t cut their workforce with the intent to qualify for “transitional relief”
  • And their health coverage is maintained until the end of the year

In addition, Safe Harbor includes alternative methods of tracking your health plan’s affordability, your employees’ employment ststus, and enrollment for your employee workforce.

What is the penalty if my company is not ACA-compliant?                                                                                        

The IRS will charge a penalty based on how many empolyees you have. (Although if you had fewer than 100 employees in 2015, penalties will not apply until 2016).

         IF YOU DO NOT…                                                                                                THEN YOU MUST PAY…

         Offer health coverage at all                                                                             $2000 for every full-time employee                                                                                                                                                                                                      excluding the first 30 employees

         Offer “affordable” health coverage                                                               $3000 for every full-time employee                                                                                                                                                                                                      excluding the first 30 employees

        File the appropriate forms                                                                                $200 for each missing form not received                                                                                                                                                                                            by the IRS

        Provide employees with written statement                                                $200 for each statement that should                                                                                                                                                                                                    have been received


For the full presentation in PowerPoint click here: —-> Your Quick Guide to ACA Compliant

For more information or instructions about the 1094/1095-C, visit the IRS website.

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