A shift in the Affordable Care Act landscape is on the horizon and there are a number of ACA compliance changes coming in 2017 reporting season. We’ve highlighted a few of the most significant changes below and have included a checklist and three simple “next steps” you can take to ensure your team is prepared.
The ALE (Applicable Large Employers) Requirement Has Been Lowered
Until now, the definition of an Applicable Large Employer (ALE) was having 100 or more full-time employees. The Protecting Affordable Coverage for Employers (PACE) Act passed last fall has reduced that number to 50. This means a greater number of smaller companies must ensure they are in compliance.
Individual states have the right to extend the definition of “small business” to 100 employees; New York and California have implemented this extension. If your business is at or around this threshold, it is important that you understand the guidelines for your state (or the states in which you operate) so that you can be adequately prepared.
The Minimal Essential Coverage Threshold Has Been Raised
In 2016, the ACA compliance guidelines called for employers to be able to provide the minimal essential coverage for at least 75% of their full-time employees. The 2017 threshold has been raised to 95% of full-time employees.
The “Good Faith” Effort Grace Period Has Evaporated
Previously, eligible companies who completed IRS forms 1094-C and 1095-C who had missing or incorrect data were able to tell the government that they had made a “good faith effort” to comply and that answer was accepted. In 2017, “good faith” is no longer good enough. Non-compliant companies risk audits and incomplete or inaccurate forms will be fined $250 per form, with a maximum fine of up to 3 million dollars a year.
In light of these and other coming changes, what should your next steps be?
- Get Educated
Be sure you have one or two employees dedicated to staying on top of the various requirements and their respective deadlines you need to meet. A great place to start researching information is at the IRS website and connecting with resources at HR organizations such as SHRM.
- Be Prepared
Many HR management software solutions, such as Ascentis ACA Compliance can help manage and automate the process of staying in compliance. Ask your provider what technology can help you manage ACA reporting. It may be as simple as updating software you already own.
- Seek Help
Be sure you speak with your benefits plan administrator and have all your questions answered, no matter how small. Remember that inadequate coverage will cost you more than the price of providing the right level of benefits. Another great conversation to have is with your HR software consultant to ensure your HR management system is prepared to handle any new requirements you may now have to meet.
The 2017 ACA compliance deadlines will be here before you know it. Now is the time to get prepared. If you have questions, we’re here to help! Connect with one of our HR experts. Reach out to us at firstname.lastname@example.org or at 800-425-9843×2314.