Because of the Affordable Care Act, millions of Americans now have quality health insurance. But the ACA has also introduced complex regulatory requirements for employers, and the risk of costly penalties for failing to comply.
Did you know the Treasury Department expects Affordable Care Act penalties paid by employers to total $117 billion?
It’s true. The government is ramping up for this as we speak.
To comply with ACA rules and reporting requirements, companies now have to collect a lot of new personal information about their employees, and often about employees’ families.
Companies with 50 or more employees should have started in January of this year gathering the data they will need to file with the IRS no later than next March 31.
This means that your people managing Human Resources, Payroll, Risk Management and Information Technology will have to work together to handle new and unfamiliar responsibilities. This has presented a real challenge for many companies.
We’re worried too many employers are failing to begin the process early enough and they could face penalties of $250 per employee, to a maximum of $3 million – or worse, $500 per employee with no cap if the IRS believes a company has intentionally disregarded the filing requirements. Fortunately, the IRS offers “transition relief” for companies making a good-faith effort to comply. Whatever a “good-faith” means when it comes to Affordable Care Act reporting obiligations.
Employers also need to be aware of the risk that an employee who is eligible for company-sponsored health insurance may nevertheless decide to buy coverage on a state or federal “exchange” or online marketplace, in order to obtain subsidized coverage.
If just one full-time employee receives a premium subsidy from an exchange, the employer faces a potential annualized penalty of $2,080 multiplied by the total number of full-time employees for failing to offer coverage in 2015. So for a company with 200 such workers, the penalty – which is not tax-deductible – could be approximately $400,000.
If you’d like help avoiding the Affordable Care Act reporting obligations and other hassles, contact Aliere Advisors today and speak to our team about outsourcing HR or setting up a cost-effective, low-risk, self funded group health insurance plan . We’re happy to help you evaluate all of your options.