In a rare display of bipartisan consensus, both chambers of Congress passed the Protecting Affordable Coverage for Employees (PACE) Act, which will make it possible for “small employers” to remain defined as groups with 1 to 50 employees rather than change to 1 to 100 employees on January 1, 2016 as the Affordable Care Act had previously mandated. The President today signed the bill into law (October 8, 2015), giving states the flexibility to determine the size of their small-group market instead of being forced into the national standard.
This action by no means takes the “ACA heat” off of businesses in 2016.The clock is still ticking.
Beginning January 1, Applicable Large Employers (ALEs) - employers with 50 or more full-time employees or equivalents will be faced with hefty tax penalties if they do not offer what’s known as “Minimum Essential Coverage” to at least 95% of their eligible employees and their dependents.These businesses also will be required to report the coverage provided during 2015 to the IRS or potentially face more fines.
The bottom line is that in spite of modest modifications to the ACA (like the PACE Act), businesses with 50 or more employees have a lot to do to prepare for 2016 and ensure they are compliant.The following is a short list of must-dos for employers:
- Determine whether you are an Applicable Large Employer.
- Confirm the health benefits offered to employees.
- Gather the information required for the new IRS reporting (Forms 1094-C, 1095-C).
- Make sure your data or recordkeeping systems can capture the required information (cost of health coverage, employee classifications, hours worked, etc.).
- Establish procedures (payroll and tax) for providing copies of the necessary communications/forms to employees and filings with the IRS.
This is just a short list of the many administrative tasks involved in ACA compliance - which is why many businesses are turning to HR and benefits experts to handle the work for them. These third party advisors can also help companies devise strategies to manage the cost of providing employee benefits and remaining compliant in the years to come.