The open enrollment period for 2019 health care marketplace ends on Dec. 15 — and that’s a date businesses need to circle on their calendars. Why? Health care plans purchased during that period will go into effect Jan. 1, 2019, as per the Affordable Care Act.
Once that happens, every large employer, regardless of whether or not it provides employer-sponsored health insurance, will need to report certain information to the Internal Revenue Series (IRS) or they will face heavy non-compliance fines. However, given the complexity involved with Affordable Care Act management, compliance can be quite challenging.
What is the Affordable Care Act?
Enacted in 2010, the Patient Protection and Affordable Care Act, commonly known as the ACA, was drafted to make healthcare more affordable and accessible for the American people. It did this in three key ways.
- The ACA expanded the Medicaid program to provide health care for low-income adults.
- The ACA offers tax credits to make health insurance more affordable.
- The ACA mandated the creation of a digital marketplace where individuals, groups and businesses could purchase health insurance plans.
Although subsequent Congressional sessions have significantly revised the ACA, the bulk of its provisions remain intact.
How the ACA Affects Businesses
To ensure its efficacy, the ACA also initially included mandates for employers and individuals regarding health coverage. These provisions imposed a fine on adults who had enough income to purchase health care coverage but who elected not to pay. Similarly, companies that maintained workforces of at least 50 full-time employees but did not offer coverage also had to pay fines. In 2018, the individual mandate was repealed, but the employer mandate was not.
As a result, companies with 50 or more workers (known as applicable large employers or ALEs) that don’t offer insurance and employ even one worker who purchased insurance through the marketplace and received a premium tax credit will be obligated to pay tens of thousands of dollars in what are called Employer Shared Responsibility (ESR) payments.
Moreover, ALEs are required to report to the IRS whether or not they offered coverage to their employees, as well as what kind of benefits coverage they provided, via 1094-C and 1095-C forms. Any ALEs that fail to report that information to the IRS or don’t disclose the coverage options they offer can be subject to hefty penalties.
Why ACA Management Can Be a Challenge
ACA management involves many moving parts, making it a real challenge for employers. For instance, ALEs must create and send out 1094-C and 1095-C forms to the IRS as part of their mandated filings for all their full-time employees. Moreover, those filings must be 100-percent accurate, accounting for any changes in employees’ permanent address, their coverage choices and any enrollments of their dependents. As errors in proper filing can result in financially devastating penalties, immaculate record-keeping is a must.
Additionally, employers must keep up-to-date records regarding worker employment status. As an example, a worker who is a part-time employee for a portion of 2018 and full-time for the remainder of the year will need must be described as such. Moreover, documents must be generated for every full-time employee who has been with the company for at least 90 days.
While the ACA continues to evolve, corporations won’t be getting any extra time to cope with revisions made to the law in 2018. It’s been reported that the IRS has already sent out thousands of noncompliance notices for violations in previous years. They’ll likely be sending out thousands more in 2019.
How Employers Can Take Control of Their ACA Management
Corporations looking for a comprehensive solution to their ACA management concerns should partner with JetPay. In addition to offering credit card acceptance and payment processing, we also offer human capital services.
We help corporations stay compliant, simplify paperwork and avoid costly penalties with ACA management services that include:
- An executive dashboard that allows for the updating of employee ACA eligibility.
- ACA regulation updates with attendant HR guidance.
- Automatic Form 1094-C and 1095-C population and filing for all applicable employees.
- Generation of 1095-C forms for mandated distribution to employees.
- Data records for aggregated group membership, minimum essential and value coverage.
- On-demand drafts of all ACA forms or pre-filing verification.
- Review of all ACA documents by JetPay’s experts to ensure completion and accuracy.
By partnering with a leading provider of vertically integrated solutions for more than 45 years, executives in every industry can protect their companies from the headaches and costs of ACA non-compliance. Contact a JetPay representative today.