Whether you’re a small or large employer, the answer is yes. As time goes by, the requirements take on more oversight and enforcement. Having answers to compliance questions at the ready will save you a lot of sleepless nights.
The ACA defines an ALE as having an average of at least 50 full-time or full-time equivalent employees. For employers with 50-99 full-time or full-time equivalent employees, there is transition relief available from the Employer Mandate for 2015, but such employers must still complete Forms 1094-C and 1095-C. 1 Employers that are not ALEs but sponsor self-insured health plans would still have reporting obligations as health coverage issuers under Section 6055. 2
I have more than 50 but less than 99 employees in 2015, but there’s no fine enforced for 2015. Why should I worry about filing?
If you have 50-99 employees, and you just don’t file, you will be out of compliance and liable. Good faith effort is a saving grace for those who make an attempt to file. Whether you get it right or wrong, as long as you make an attempt, you’re OK. However, if you just don’t file, they can still fine you and the fines are pretty heavy. While the IRS and DOL were not planning on fining anyone with 50-99 employees for 2015 benefits year, they can still choose to do so for scofflaw employers who just don’t file
I have a payroll company that does my taxes as well. Won’t they automatically do it for me?
Not necessarily, for most that will be an additional service. The ACA is a complex law and it touches more than tax forms. You need HR, Health Benefits AND Payroll/Tax services to be in sync with each other to file correctly. For a payroll company, it can require a lot of additional compliance training and certification to know the law. With liability and increased workload, comes additional cost and your payroll company doesn’t necessarily absorb all of that at no cost to you. In most cases, you will have to pay an additional filing fee, not to mention adopting special software that works with your payroll service to provide accurate reporting. Be aware that if you provide your payroll service with false documentation to avoid paying a penalty and you get caught, your payroll provider has no liability. Always provide accurate documents and pay for filing service. That way if there’s a mistake, you have assistance with the auditing agency.
FYI: If they give you a free tool to file your own, beware! Most of those free tools are not ACA compliant and the provider avoids any liability when it is a free, do it yourself tool. If you get audited and fined, you’re on your own.
Will reporting be simple or complicated, find out by answering the following questions:
- Are all of your employees on salary?
- Are all your employees working 30 or more hours a week?
- Do you have the same employees from year to year with little or no staff changes?
- Do you offer minimum essentials coverage to your employees that work full time?
- In addition to full time, do you have a large number of employees that are part time?
- Did you hire using an employment agency?
- Have you had 40 or more employees in 2015?
- Did your health coverage or carriers change since 2012?
- Do you have a grandfathered self-funded health care plan?
- Do you have high turnover?
- Do you have seasonal employees?
If you answered yes to questions 1-4, your filing will be simple and fairly straight forward.
If you answered yes to any of the other questions, your filing will be more complicated and you will most likely need to keep very accurate records for 2015 and beyond. A reporting software service would be in your best interest. If you don’t have one now, consider getting one very soon.