ACA Employer Reporting - Deadlines Approaching
What is the Employer Shared Responsibility Provision?
Although there were so many laws and regulation changes over the last 18 months, the ACA Reporting requirements have remained mostly the same. Under the Employer Shared Responsibility Provisions, sometimes known as the “pay or play provisions,” an ALE, or an Applicable Large Employer, is required to provide affordable and minimum value health coverage to all full-time employees and their dependents. What does that mean? According to the IRS, a health plan is considered minimum value if the company covers at least 60% of the cost of benefits. Affordability is a bit more complicated. The standard for determining if a plan is affordable is that the employee should pay no more than 9.5% of that employee’s household income. Since it is not always easy to determine an employee’s household income, there are some other parameters that ALEs can follow to remain compliant with these provisions.
How is your ALE status determined?
If a company employed on-average 50 or more full-time, or full-time-equivalent, employees in a preceding calendar year, that company is considered an ALE. According to the example provided by the IRS, for ALE status determination in 2021 an employer would review the size of their workforce in 2019. If your company is an ALE, you must follow specific reporting requirements to avoid receiving a penalty letter from the IRS. These requirements have strict deadlines that are rapidly approaching. If you need help determining your ALE status, visit our website.
What is ACA Reporting?
Companies with an ALE status must report their health coverage plans to the IRS in order to remain compliant under the employer shared responsibility provisions and receive the premium tax credit. In addition to reporting to the IRS, ALEs are required to also provide statements to their employees regarding the information filed with the IRS. The filing deadlines for 2021 have been extended to provide ALEs ample time to gather the required information. The deadline to paper file 1095-B and 1095-C forms is March 1, 2021, with a distribution deadline of March 2, 2021. For e-filing companies, the deadline is March 31, 2021. These deadlines are quickly approaching and we are now offering ACA Employer Reporting services.
Turning Point HCM is here to help
Our services are designed to work with you throughout the entire year to gather the required information over time and avoid the year-end rush. We can also help with the filing of the required forms. For more information, visit our website. These requirements can be confusing, but with our services, they don’t have to be. Let us help take this off of your plate and ensure that you remain compliant this year and the years to follow.