Forced Minority Burdened Majority comparison_Integrity Data ACA Compliance Solution

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Content updated December 11, 2020

When we first began talking with employers about Affordable Care Act compliance, the discussion always centered on ACA penalty risk management and who needs to care.

That was early 2012. In every case then, the employer introduced the topic.

  • We came to think of our early clients as the Forced Minority – companies either offering coverage for the first time or expanding their existing offering to a wider employee base. This segment of U.S. employers first worried about identifying their employees eligible for health insurance – so they could get offers out pronto! – and later sorted through IRS reporting details of the coverage offers.
  • Penalties are top-of-mind for the Forced Minority. They were aware that, by offering limited or no health insurance, they were vulnerable to significant financial consequences when the ACA employer mandate would get implemented.
  • They knew they needed help in getting at their workforce data in new and exacting ways in order to avoid or minimize IRS non-compliance fines.
  • They understood their information systems had to be rewired. And they appreciated that this process would not happen overnight.

Our current discussions with employers about ACA compliance still center on penalty risk management, but of a different kind. And now, we are often the ones introducing the topic.

Seldom are the talking points top-of-mind for the employer.

  • We see many of our newer clients as the Burdened Majority – those employers who aren’t worried about who to cover because they already cover everybody. Their sole worry about ACA compliance is filling out IRS Forms 1095-C and 1094-C: the yearly statements for their employees and the IRS, and the most demanding workforce reporting yet.
  • Employers in the Burdened Majority dismiss talk of penalties: “How can you be ACA non-compliant if you’re offering coverage that provides quality beyond what the law mandates?”
  • Many of these employers are unaware that they need to get at their data for monthly breakdowns. Nor are they aware that, if they don’t file the new IRS returns, they will face a penalty of $550* per required form.
  • Burdened Majority employers circle back to mentions of “year-end reporting.” They tell us they will prepare for Forms 1095-C and 1094-C production at the end of the calendar year.

Measuring the ACA Burdened Majority

According to an Employee Benefits report released in July 2017 by the U.S. Bureau of Labor Statistics, 70% of workers in the United States had access to health care benefits through their employer as of March 2017. When broken down by sector, this percentage varied. In the public sector, the percentage of access to health care coverage was 89%. In the private sector, access ranged from 51% at organizations that employ fewer than 50 workers to 89% at organizations that employ 500 or more workers.

Regardless of the variance, health care plans offered by most U.S. employers in this recent survey exceeded the minimums dictated by the Affordable Care Act. For this majority of employers, compliance with the coverage mandate of the new health law is a non-issue: They already are offering quality health insurance at minimal or no cost to their employees.

The ACA Compliance Disconnect

The greatest challenge – and biggest vulnerability – for the Burdened Majority is a lack of understanding about the IRS reporting component to Affordable Care Act compliance.Cartoon of ACA Burdened Majority_Integrity Data ACA Compliance Solution