What You Need to Know About ACA Reporting

With tax time approaching, employers and HR professionals are fully immersed in ACA reporting activities.

Recent executive orders and the passage of a large tax reform bill last year have resulted in ongoing uncertainty about the future of the ACA and employers’ responsibilities—yet previous tax years still require reporting and compliance.

So how can you minimize the ACA’s mess? At Businessolver our recent webinar addressed this issue, and we’ve expanded our recommendations to offer more guidance on how to deal with reporting deadlines:

Penalties still possible. The Tax Cuts and Jobs Act, signed on December 22, 2017, repealed the individual mandate that Americans carry health insurance. The law does not, however, repeal all regulations that apply to employers, including employer shared responsibility payments and employer reporting requirements. This means employers must adhere to regulations that pre-date the passage of the tax bill or face potential penalties.

Furthermore, the IRS is still sending penalty notices for tax year 2015, and it’s unclear when they’ll work through the backlog and begin distributing 2016 notices. It’s therefore important to stay vigilant about penalty notices and meet all requirements for tax year 2017 reporting.

AHPs are TBD – FYI. Association Health Plans (AHPs) may provide less coverage than fully insured plans and cost less for those who participate. An executive order from October 2017 expands the availability of these plans, and proposed regulatory changes have been issued, but they have not been finalized yet. Until there is further clarification, employers should proceed with caution as the final version of the regulations are not yet known. The proposed regulations could offer some additional opportunity, and some additional risk, and many smaller employers are watching this carefully, so keep an eye on this moving forward.

Keep things clean. With penalty notices coming from 2015, and 2016 and 2017 yet to be addressed, it’s important that employers practice good record keeping and keep contact information up-to-date. Penalty notices will be sent to the employer contact, not a benefits administration company or service provider, so if that name or address has changed, it could reduce the time available for research and response to the penalty notice. Continuing uncertainty about the future of the law also means that reporting requirements could change, so it’s always a good strategy to stay current with your records.

The ACA may still be making a mess for employers, but there are ways to make sure that mess doesn’t get out of control. If you’d like to learn more, see our e-book below: