Businesses with 50 or more full-time employees are required to comply with the Affordable Care Act (ACA) by filing required documentation including forms 1095-C and 1094-C. This includes year-end payroll summary data for each full-time employee along with the year’s payroll and benefits data broken down by month. Failure to comply with ACA reporting can cost your business expensive penalties and fees.
To remain ACA compliant your business needs continuous tracking of not only hours worked by each employee but also any time employees are paid for paid leave, holidays, vacation time, sick leave, FMLA absences, jury duty or military deployments. You’ll also need to keep monthly measurements of which employees are full-time as defined by ACA and therefore eligible for health insurance. ACA defines monthly eligibility requirements as employee service hours totaling 130.
New employee hours must also be tracked to determine when new employees become eligible for health insurance benefits based on hours of service. If you fail to comply, ACA will assess a penalty and you will receive an Employer Shared Responsibility Payment notification.
The 1095-C tax form is required for every full-time employee and must be filed at the end of the year. The form must show which employees were offered health insurance and at what cost. Employee forms must be filed with the IRS using a 1094-C transmittal form. There are filing rules which differ depending on your organization type (sole proprietor, parent-subsidiary, etc.).
The ACA also has compliance requirements for small businesses (employers with 1-50 full-time employees) who provide health and dental coverage to employees. There are compliance rules about the 90-day maximum waiting period, summary of benefits and coverage (SBC) disclosure rules, flexible spending accounts (FSAs), workplace wellness programs, employer share responsibility payment and more. The HealthCare.gov page provides more information about all the ACA requirements for small business owners.
Small businesses can qualify for the small business health care tax credit which can be worth up to 50% of the costs of employee health premiums by enrolling in a Small Business Health Options Program (SHOP) plan. This applies to employers with fewer than 25 full-time employees with average salaries of $50,000 annually or less who pay at least 50% of employee health insurance premium costs. You can find out more about SHOP eligibility requirements here.
If keeping up with ACA compliance requirements has become a headache for you, we have solutions to help! POA can help your business with ACA compliance regulations and reporting requirements. Contact us and let us help you simplify compliance requirements for your organization.