So you’ve gotten your feet wet in the sea of Affordable Care Act mandates. You feel ready, willing and able to tackle ACA compliance for 2016. Before settling in and getting too comfortable, let’s review some changes that have been made to 2016 filing. 2016 is the year to make sure your company’s ACA Compliance Solution is in place because the time of mercy and grace periods from the IRS has passed. Make sure to note these changes: it could be the difference between coming out on top in 2016 or drowning in IRS fines and penalties.
Percentage of Employees Offered Coverage
The percentage of employees that must be offered health care coverage has been raised from 70%, for companies with 100 or more full-time employees in 2015, to 95% of coverage, to companies with at least 50 full-time or more employees in 2016. This offer of coverage excludes the first 30 employees in a company in 2016. If coverage is not offered to 95% of employees, a company is at risk of being penalized. According to the penalty changes just released from the IRS:
- The penalty for failing to file a correct information return is $260 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,193,000.
- The penalty for failure to provide a correct payee statement is $260 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,193,000.
- Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to file the returns and furnish the required statements.
In 2015 there were several different types of transition relief available to companies. This relief is no longer available to all ALEs in 2016. Certain requirements must be met in order for transition relief to apply. According to the IRS, these conditions are:
- The employer is an Applicable Large Employee (ALE) or is part of an Aggregated ALE Group that had 50 to 99 full-time employees, including full-time equivalent employees, on business days in 2014.
- During the period of February 9, 2014, through December 31, 2014, the ALE or the Aggregated ALE Group of which the employer is a member did not reduce the size of its workforce or reduce the overall hours of service of its employees in order to qualify for the transition relief.
- During the period of February 9, 2014, through the last day of the 2015 plan year, the ALE or Aggregated ALE Group of which the employer is a member does not eliminate or materially reduce the health coverage, if any, it offered as of February 9, 2014.
Now is the time to ensure that you know the rules and are prepared to close out reporting year 2016. Although changes have been made, keeping up-to-date with the latest news is the key to slaying the ACA beast.
By Integrity Data, Solution Provider for ACA Compliance