How to Stay Compliant with Affordable Care Act
As of this year all businesses with 50 employees and up must perform Affordable Care Act (ACA) reporting and audits to ensure their compliance. To demonstrate that a business is in fact ACA compliant everything must be done on paper otherwise companies will face IRS penalties.
Many employers struggle with this process, as it is complicated and it requires much paperwork to be done including specific forms and filing. The reporting requirement doesn’t apply to the 96 percent of businesses with fewer than 50 employees but for those businesses affected, here is what you need to know about ACA compliance:
– The ACA reporting rule applies to all employers with 50 or more full-time employees, however many employers have difficulty determining whether their definition of “full-time” aligns with the regulations. You can find more information about full-time and full-time equivalent (FTE) employees as outlined by the IRS here.
– Employers must track employee hours throughout the year and prove that coverage was offered to all eligible employees meaning full-time and full-time equivalent (FTE).
– Employers must report the costs of employer-sponsored group health plans on their tax forms including company’s and the employee’s contributions. For more information see IRS post about Form W-2 Reporting of Employer-Sponsored Health Coverage here.
For more information about Affordable Care Act and ACA compliance, click here.