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How to avoid costly ACA penalties

09/08/2016

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Since its inception, the Affordable Care Act (ACA, also known as Obamacare) has placed a significant responsibility of providing health care coverage to employees and their dependents on employers. Comprehending the ACA regulations and reporting requirements can be difficult, which is why it’s always a good idea to seek professional advice to ensure that you’re compliant when trying to navigate the complexities.

The penalties associated with an employer’s failure to offer health insurance is a concern with most employers and can be quite costly. The best way to avoid these penalties is to offer a qualifying health care plan.

Employers have many requirements under the ACA regulations in regard to the levels of health insurance coverage offered, the cost of the coverage and annual reporting. Employers who have more than 50 full-time and equivalent employees are required to offer health insurance. If not, they may be penalized.

An employer who is considering offering a group-sponsored health plan should first work with their insurance broker to ensure their health plan meets the minimum value requirements and affordability thresholds prior to open enrollment. It’s helpful if the employer has an all-in-one enrollment tool in place that also includes ACA functions (including employee status tracking, ACA monthly code reporting and form production). However, that is not the case for most employers.

Another option for an employer whose enrollment tools do not include ACA reporting is to outsource those ACA reporting functions. It’s not necessary to have an outsourced ACA vendor in place at the time of open enrollment, but it is important to keep meticulous records of general employee information, hire dates, health benefit eligibility dates, coverage offerings, enrollments, benefit waivers and terminations. An employer who must outsource their ACA reporting functions should have their vendor in place by mid-year.

For employers who need assistance with health plan selection, plan enrollment or ACA reporting, LBMC Employment Partners can help by providing an all-in-one benefit enrollment, employee tracking and ACA reporting system. LBMC EP provides full brokerage services, which includes shopping for group health plan options, assisting with employer contribution strategies, providing enrollment tools and processes, employee education, enrollment assistance, ongoing claim status support, and monthly invoice reconciliations.

For employers who need ACA reporting assistance only, a process can be developed to collect payroll and enrollment data from the employer’s payroll and benefit sources and use that data to prepare for forms 1094-C and 1095-C. For employers with more than 250 forms to file, LBMC EP has an approved electronic filing system in place.

With so many intricacies, the ACA can be difficult to understand, so it’s in your best interest to seek professional help in navigating the rules.

How to avoid costly ACA penalties

Publication

The Tennessean