According to a recent study of midsized business owners, more than a third of midsized businesses have been fined or penalized for failing to comply with workforce management laws. Yes, you read that correctly, more than a third. Let that sink in for a moment. If you’re a midsized business owner, and you don’t have a plan for addressing your responsibilities under the Affordable Care Act (ACA), you can expect to be counted in that depressing statistic, however, you don’t have to be.
It would seem midsized companies are getting the message. According to ADP’s 2014 Midsized Business Owner’s Study, the top three concerns of midsized business owners were the cost of healthcare benefits, growing levels of regulatory mandates and, yep you guessed it, the ACA. So awareness that there is an important, new set of compliance issues to address is definitely high among the midsized. Yet the same study revealed that less than 25% of respondents felt well prepared with the information and processes necessary to become compliant.
Whether it is offering wellness programs, modifying the numbers of health plans they offer to employees, recalibrating medical insurance costs or simply outsourcing benefits administration, companies are trying different approaches. As the law continues its slow multi-phased, multi-year roll out, different pieces of the law have been activated. This too has added to the confusion.
Here are a few imminent requirements for the rest of 2015 and into 2016 to focus on if you’re a mid-sized company trying to be compliant.
If your company has more than 50 full time employees or full time equivalents (and less than 600), you’ll need to comply with the employer “Shared Responsibility” provision of the ACA. Businesses of this size are required to begin recording health coverage information in case of audit. This is accomplished by filing two new forms with the IRS in 2016 (when you file your 2015 business taxes).
- Form 1094-C: Transmittal of Employer-Provided Health Insurance which employers use to report offers of coverage and enrollment to the IRS.
- Form 1095-C: Employer-Provided Health Insurance Offer and Coverage which employers provide to the IRS and each full-time employee.
Since reports for 2015 are due in 2016 it is recommended that midsized companies begin preparing now for the following deadline dates:
- Returns first due to the IRS by March 31, 2016 (February 28, 2016 if filing by paper)
- Statements first due to applicable individuals by February 1, 2016 based on 2015 data
For an excellent and detailed breakdown of the latest new reporting requirements under the ACA, visit this insight article published last week on April 8, 2015 by esteemed tax consultancy, McGladrey. It is an excellent source of trustworthy information on this subject.