While the election results may put a new twist on the Affordable Care Act (ACA), large employers and employers with self-funded insurance plans still have a requirement to file their 2016 1094/1095 forms in a timely manner. The non-deductible penalties for not filing these forms range from $260 to $520 per form.
The IRS has extended the deadlines for filing the 1095 forms, but only until March 2, 2017. This means that employers need to start gathering their information and reconciling employee hours to the insurance offering that was made to each employee. While the forms seem basic at first glance, there are specific rules that tend to be forgotten, such as:
- The requirement for Applicable Large Employers (ALEs) to offer 95 percent of full-time employees’ health insurance in order to use any of the three safe harbors for any employees that waive coverage. This is a rule that is too often overlooked, resulting in inaccurate forms.
- The rule that allows employers who use the lookback measurement method as a way to reclassify a full-time employee who is in his/her stability period as a part-time employee is often overlooked. Typically when an employee has worked full-time hours in the lookback period, they are classified as full-time employees in the following stability period. However, if an employee takes a part-time position in the stability period, they can be classified as a part-time employee on the first day of the fourth month if they average less than 30 hours a month for three prior consecutive full months and they were offered health insurance when they were first hired that met minimum value.
Resources
Are you up to speed on the ACA? We’ve got you covered.
- Watch our ACA Overview video to learn more about common compliance considerations.
- Listen in to our recent ACA video where we address a couple common questions.
Case Studies: Eide Bailly Helping Clients Comply
Eide Bailly professionals understand the complexity of the ACA. Our case studies show our attention to detail, in-depth knowledge of the act and our commitment to helping clients.
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Controlled Group Awareness Helps Clients Avoid Penalties
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Understanding Measurement Periods Leads to Saved Money
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Employee Status Analysis Brings Positive Results
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Quick Thinking Helps Client Meet Compliance Deadlines
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Revaluating Compliance Obligations Reduces Penalties
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Filing Requirement Knowledge Saves Client Resources
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A group of related restaurants that each had less than 50 full-time employees but together had more than 50 became subject to the ACA compliance requirements due to controlled group. We helped the client see their compliance obligation and filed the 1095 forms for them, saving them costly penalties.
We recently assisted a lawn care and snow plowing company with determining which of their employees are considered full time, part time or seasonal under ACA rules. This enabled the business to accurately ensure they were not subject to penalties that could have been up to $2,000 per employee.
We recently helped a hotel that operates a ski area to determine whether or not they qualified as an applicable large employer. Due to the seasonality of the snow ski industry, the business had a large number of seasonal employees from November to May each year but had only about 10 year-round full-time employees. Through comprehensive analyses, we determined that the client only had about 40 full-time-equivalent employees, and so the employer was not subject to the filing requirement, nor were they required to offer insurance to these employees.
With the filing deadline fast approaching, a financial institution had recently gone through a merger and lost their ACA compliance person in the process. The client had purchased software prior to the merger but found out that what they paid for didn’t allow for e-filing the required ACA forms. Our team provided the employer with a template that made it easy to download their data and send it back for us to upload and e-file.
A client that we had provided ACA consulting to in 2013 requested our assistance with their 2015 ACA forms at the last minute. In 2013, the client was a mid-sized employer with almost 80 full-time employees. However, between 2013 and 2015, the client had lost their mid-size employer transition relief due to dropping their health insurance coverage after the final pay-or-play rules were issued. This caused a couple of their employees to receive subsidies from the exchange, which resulted in the client facing a slew of penalties totaling almost $100,000. Our ACA team was able to look at employee hours for the current counting period and determine that the client had just over 100 qualifying full-time employees, which granted them additional transition relief and reduced their penalties to zero
A large trust providing insurance to school districts asked Eide Bailly if they have an ACA filing requirement. After a conversation with the client and their attorney, it was determined that the organization had 70 full-time employees and needed to complete 70 1095-C forms for their employees in addition to the 19,000 1095-B forms for the school district employees that were provided insurance through the trust. The insurance company did not realize their filing requirement. Knowing their compliance requirement saved the client $250 per form.