So things are going well. You’ve looked up all the Affordable Care Act Filing tips on the internet. You’ve reviewed the 1094/1095 forms and spoke to your payroll provider.
You’re ready to go.
But you’ve forgotten the number one challenge of the ACA (Affordable Care Act / Obamacare).
This challenge trips up many people, even those who have studied these plans in detail.
What is that challenge? It’s a very simple one.
Compliance is Confusing & COMPLICATED! But ACA compliance is important.
It’s vital (this seriously cannot be overstated.) Decision makers looking to avoid paying costly penalties realize that compliance is a complex process.
But it’s also essential to know the penalties for Non-Compliance. Take a look:
What is the penalty for not offering minimum essential coverage?
- The penalty for not offering coverage is generally equal to the number of full-time employees the employer employed for the month (not counting the first 80 in 2015, 30 in 2016 and following), multiplied by 1/12 of $2,000.00. Only full-time employees (not full-time equivalents) are counted for purposes of calculating the penalty. The penalty may be indexed for inflationeach year.
What is the penalty for providing minimum essential coverage that is not affordable?
- The penalty for not offering coverage that is affordable or that provides minimum value is generally equal to the number of full-time employees receiving subsidized coverage through an exchange for that month multiplied by 1/12 of $3,000.00. However, the penalty will not be greater than the penalty that would apply if the employer offered no coverage at all. Only full-time employees (not full-time equivalents) are counted for purposes of calculating the penalty. The penalty may be indexed for inflation each year.
- Generally, employees who are eligible for employer-sponsored coverage are not eligible to receive subsidized coverage through an exchange. However, an employee may qualify for subsidized coverage through an exchange if his or her household income is less than 400 percent of the Federal Poverty Level and: a) the employer does not pay at least 60 percent of the allowed costs under the employer-sponsored plan (the coverage does not provide “minimum value), or b) the employee’s required contribution for coverage exceeds 9.5 percent of the employee’s household income (the coverage is “unaffordable”).
If this language sounds complicated and confusing it’s because it is.
Your Affordable Care Act filing strategy should be designed to make compliance easier. Not the other way around. At the end of the day, your peace of mind is paramount..
We’ve prepred a FREE set of affordable care act tax forms for you here:
We’re AccountFirst and “We Make the Complex Simple”
If you remember that piece of information, it’s much easier to put ACA in perspective.
Contact us if you would like to learn more about simplifying the ACA filing process.
PLEASE NOTE: Accountfirst, Inc. will not advise nor consult on the IRS reporting requirements. It is highly recommended that you as the agent, DO NOT advise on and or complete the IRS filing forms for the employer, as this needs to be completed and consulted on by a certified individual or firm. The information being provided is strictly informational purposes and is not to serve as legal advice. This correspondence is being provided to increase your understanding and aid in the discussion of this topic with your customers. . .