ACA: Pay or Play & New Forms

As we enter the second half of 2015, it has become very clear that any changes to the Affordable Care Act (ACA) employers had hoped would impact the next major set of requirements are not likely to occur. As a result, employers of all sizes need to focus on what will be required of them as of 1-1-16. Normally companies start planning their year-end benefit related activities around Halloween. This year we strongly recommended that the process start around Labor Day, at the latest, given the mix of new issues some will face, including new reporting requirements that will hit in January 2016.


Here’s a quick summary of the key ACA focused issues to consider:


Pay or Play – Affordable Care

-Those with 100+ employees (or Full Time Equivalents (FTEs) already are subject to the requirement to offer “affordable care” or face a penalty (effective 1/1/2015).

-Those with 50-99 Full Time Equivalents (FTEs) will have to provide “affordable care” to their employees beginning 1/1/2016, or face a penalty as well. As such, you should expect to hear the terms “Bronze Level Plan” as a way to describe the minimum acceptable level of coverage you must offer your employees. Similarly, the ACA also dictates the maximum amount an employee can be asked to pay for these plans in order to comply. TRANSLATION:  Your plan design for 2016 MAY need to change, significantly in some cases, to comply… or your firm may choose to pay penalties and maintain your current plan.


ACA Reporting Forms – 1094/1095

-ALL businesses will have to file new IRS based forms (1094 and 1095) during the first quarter of 2016 – dates for filing vary based on a number of variables.

-These forms are essentially to prove to the IRS that you have complied with the ACA (or did not comply and therefore owe a penalty). Further, a form is to be given to each employee for the previous tax year (like a W-2) that they will then file with their tax return showing that they have (or do not have) insurance. NOTE: Employees who have not taken coverage offered, and are otherwise not insured, will face a personal tax penalty.

-The 1094/1095 form completion process will be time-consuming depending on your headcount for the year, as well as how the data is managed today.

-Many of the Payroll Service firms are offering varying options for handling 1094/1095 compilation and filing, some of which come with a significant expense and even a requirement that you commit to larger data management services.


For more information, on the above information, please click here.