There was a time when the Affordable Care Act (or ACA) was synonymous with the individual mandate – namely, that everyone had to have health insurance. Those discussions were more or less political debates about the bounds of government and the rights of young, healthy adults to have health coverage. You might have been fortunate enough to learn what a “death spiral” meant and why, without a healthy dose of the Tinder/WhatsApp/twenty-something crowd, many of us would be caught in a vortex of ever-increasing premiums. It’s now safe to say those halcyon days are over.
If you’re in the corporate tax department and ACA compliance has not been successfully punted off to HR benefits – or, if you’re part of HR benefits and you’ve caught this illustrious potato – then you’re all-too familiar with the ACA employer mandate and the requirements to provide affordable health care to employees and all the reporting that goes with it. Good news: You only need to worry about this if you’re an Applicable Large Employer (ALE).
But here’s the bad news: An ALE actually isn’t that large, as it refers to any employer with 50 or more employees.
Looking a bit deeper into it, many companies might scan the regulations and quickly assess that they don’t have much to worry about. After all, they provide health insurance and they’re quite sure it meets the affordability requirements, so it should only be a matter of gathering and reporting the information…right?
Look just a bit deeper again, and that’s where some of the challenges come in. For instance, who knows just how many full-time employees they have (if full time is defined as an average of 30 hours per week), and how will that be determined? This may be quite manageable if all you have and expect to have are full-time, salaried employees. But, this becomes something altogether different if you have a rapidly changing workforce with a lot of part-time employees. Then this becomes even more complicated when reporting across a company that’s comprised of multiple legal entities.
Compounding the challenges are the aggressive timelines – for all intents and purposes, this needs to be done very soon. Employees will need to be provided with the new reporting forms by Jan. 31, 2016, and that information should be filed with the IRS by March 31 for data you should be tracking today.
Subconsciously you may be thinking, Maybe it will all go away or get delayed.
Maybe – but what position would that put you in if it didn’t?
Visit tax.thomsonreuters.com/aca for more information, including our free whitepaper and webinar!