Highlights
- The ACA’s complex requirements and regulations can place a burden on businesses.
- Partnering with a specialist can help you stay compliant and reduce the time spent on paperwork and complex calculations.
- At CertiPay, we provide a series of services to keep your business ACA compliant. Contact us to get started!
The penalties for not complying with the Affordable Care Act’s (ACA) Employer Shared Responsibility provisions and other requirements are daunting. But proactive employers can take the right steps to protect themselves.
Feeling lost in the maze of ACA regulations? At CertiPay, we can help you navigate these challenges. This article explores 7 key ACA compliance services your business might need.
Let’s dive in!
What Is ACA Compliance?
The Affordable Care Act (ACA), also known as Obamacare, requires large employers – that means companies with 50 or more full-time employees – to provide health insurance to at least 95% of their employees.
Employers must report to the IRS about their health insurance offerings and employee coverage, filling Forms 1094-C and 1095-C.
ACA compliance, then, refers to the specific regulations employers must follow to ensure they’re meeting their obligations under the law and avoiding potential penalties.
Health Coverage Obligations and Tracking
Not sure if the ACA applies to your business? Here’s a quick check:
- Company size. Does your company have at least 50 full-time employees (including those counted as full-time equivalents) on average for the prior year? If so, you’re considered an Applicable Large Employer (ALE) under the ACA. This means you have specific obligations regarding health insurance coverage.
- Identifying your employees. List all your full-time employees and those counted as full-time equivalents (FTEs). These are the employees who could trigger penalties if they aren’t offered minimum essential health coverage.
- Health Plan Qualifications. Ensure the health insurance plan(s) you offer meet the ACA’s standards:
- Does the health plan meet minimum essential coverage requirements?
- Does the plan cover a significant enough portion of employees’ medical expenses to be considered valuable?
- Is the employee’s share of the premium cost considered affordable relative to their household income?
It’s important to track offers on health insurance — especially if employees decline coverage. Keeping waiver forms signed by employees serves as documentation. These forms confirm that you offered qualified coverage and that employees chose not to participate. This can help avoid penalties if an employee receives a premium tax credit.
7 Services for an ACA Compliant Business
ACA compliance can be complex, but partnering with a team of experts can simplify the process. At CertiPay, we offer a comprehensive suite of services to help you navigate ACA compliance with ease.
Here are 7 ACA compliance services that your business needs:
1. File Forms 1094 and 1095
The ACA requires large employers (with more than 50 full-time equivalent employees based on the previous year) to file annual reports with the IRS and provide their employees with copies of these statements.
These forms, known as Form 1094-C and Form 1095-C, are crucial for demonstrating ACA compliance.
Our team can take care of:
- Monthly tracking the health benefits offered to your full-time employees throughout the year.
- Accurately filling out both Form 1094-C (the employer summary) and individual Form 1095-C for each covered employee. This includes details like coverage offered, enrollment status, and premium costs.
- Meeting the IRS deadlines for submitting these forms, typically in early March for the prior year’s coverage. This helps you avoid potential penalties for late filings.
2. Prepare ACA Information Reports
Our team can analyze your business data, helping you make strategic decisions regarding your health insurance plan.
This involves:
- Identifying your total number of full-time employees and full-time equivalents (FTEs) for the year. This is crucial for determining your ALE (Applicable Large Employer) status under the ACA.
- Analyzing your health insurance plan costs and performing calculations to demonstrate if the employee share of premiums is considered affordable under the ACA’s guidelines. This helps you avoid potential penalties for offering unaffordable coverage.
3. Calculate Penalties
The ACA imposes penalties on certain employers who fail to comply with its health insurance coverage requirements.
We can analyze your company’s size and health insurance offerings to determine if you’re subject to ACA employer shared responsibility penalties. If you are subject to penalties, we can calculate the potential financial impact for two key areas:
- Not offering any health insurance plan to your full-time employees.
- Not providing affordable health coverage or coverage that meets minimum essential standards.
4. Distribute Notice of Exchanges and Subsidies
The ACA requires most employers to inform their employees about the Health Insurance Exchanges (Marketplaces) and potential federal subsidies they may qualify for.
We can provide you with U.S. Department of Labor approved notices to give to employees for your specific situation. There are different notices for employers who offer health insurance and those who don’t.
5. Assist with W-2 Reporting of Employer Health Costs
The ACA requires certain employers to report the value of the health insurance coverage under employer-sponsored group health plans. This reporting is done on W-2 forms, Wage and Tax Statement. This information is reported for informational purposes only and does not affect employee taxes.
Here’s how we can support your business:
- Helping you understand if your company size triggers the ACA’s W-2 reporting mandate.
- Assisting you in gathering the necessary data on the cost of your employer-sponsored health plan coverage.
- Ensuring the health coverage cost information is accurately integrated into your W-2 forms for employee distribution.
Certain types of coverage (such as major medical) currently must be reported, while other types are optional or don’t need to be reported.
6. Process Medical Loss Rebates
The ACA includes a provision known as the Medical Loss Ratio (MLR). This requires health insurance companies to spend at least 80% or 85% of premium dollars on actual medical care and quality improvement initiatives. If an insurer falls short of this threshold, they must issue rebates to their policyholders.
The insurance company could issue rebates in the form of reduced insurance premiums annually, given as cash to your company or your employees.
We can guide you through the different ways employers can receive and distribute MLR rebates, and help you understand their tax implications.
7. Assist with Benefit Plan Administration Offerings
Managing employee benefits can be a complex and time-consuming process. At CertiPay, we can streamline your operations and ensure compliance with the ACA and other regulations through our comprehensive Benefits Administration services.
Here’s how we can help:
- Enrollment: Our team will manage the entire enrollment process, verifying employee eligibility, handling dependent coverage options, and processing changes due to qualifying life events (marriage, birth, divorce, etc.).
- COBRA compliance: We ensure your company adheres to COBRA regulations, which govern the continuation of health coverage for eligible employees who lose their benefits.
- Flexible Spending Account (FSA): We help you and your employees understand and comply with the ACA’s limits on FSA contributions.
- Communication & acknowledgements: We facilitate employee communication and acknowledgements for important benefit plan documents like the Summary of Benefits and Notice of Exchanges and Subsidies.
Keep Your Business ACA Compliant with CertiPay
The Affordable Care Act (ACA) makes payroll and HR processes more complex for businesses. At CertiPay, we understand these burdens and are here to help.
Our team of specialists stay up-to-date on the latest ACA compliance regulations, ensuring you meet all reporting requirements, and saving valuable time spent on admin tasks.
Let’s simplify ACA compliance and empower your business to thrive! Contact CertiPay today and learn how we can help your business.
