After the Affordable Care Act (ACA) was enacted in 2010, it quickly transformed the insurance requirements companies had to meet. Because of ACA requirements for employers, medium and large organizations are now required to offer health insurance. In addition, many small businesses are held to these ACA compliance requirements as well. 

If you must comply with this law, there are certain ACA filing requirements and eligibility rules you should know about. With payroll ACA services, you can get a head start on meeting all of your regulatory obligations. 

The Basic ACA Filing Requirements 

Each workplace must comply with ACA requirements for employers if they are considered an applicable large employer. These ACA filing requirements involve forms for the Internal Revenue Service (IRS) and internal ACA tracking. You should also use some type of calendar or agenda system to track when all of your forms and calculations must be carried out.

1095-C Forms for Applicable Employees and the IRS

Form 1095-C is one of the two key ACA requirements for employers. In addition to giving a Form 1095-C for each employee to the IRS, you are also required to send Form 1095-C to your employees as well. On the employee side, this form is used to determine their eligibility for ACA tax credits. 

1094-C Forms for the IRS 

Another one of the most important ACA compliance requirements is Form 1094-C. This form is essentially a summary of Form 1095-C, and it is only sent to the IRS. 

The due dates vary based on whether you submit paper or electronic forms to the IRS. However, employers who have more than 250 information returns must submit these forms electronically. 

Eligibility Tracking 

When complying with the ACA for employers, it is important to track your employment count each month. If you have more than 50 full-time workers, you are required to offer health insurance. Because of this, you should use your payroll ACA services to calculate the hours worked by part-time employees each month and the number of full-time workers you have on staff. 

At the end of the year, your monthly number of employees must be added up and averaged out. Then, this information is used to determine your insurance requirements for the upcoming year. 

Beyond tracking your company’s ACA filing requirements and insurance coverage, you also have to determine which employees are eligible for coverage. You only have to offer coverage to full-time workers, which is defined as employees who work 30 hours a week or more. There are different calculation methods you can use, and you must use the same measurement period and methods for every worker. 

Due Dates 

Due dates are an incredibly important part of ACA compliance requirements for workplaces. Each year, you must calculate whether your workplace falls under ACA eligibility rules. If you are large enough, you must determine which employees are eligible for health insurance. For workplaces that use the look-back method, you should write down the measurement period and stability period dates on a calendar so that you know when each period starts and ends.

With the ACA and employers, you must turn in your Form 1094-C and Form 1095-C at the appropriate times. If you file paper forms, these forms are due by February 28. For electronic versions, you must file these forms before April 1. 

 

Requirements to Be Considered an Applicable Large Employer (ALE) 

In a recent Mission to Grow podcast on the “Affordable Care Act: Rules, Records and Repercussions,” Brian Shenker, a principal at Jackson Lewis P.C., talked about the importance of figuring out whether you are an ALE or not. “The biggest thing,” Shenker said, “is to determine whether they’re subject to this law. Especially for growing businesses that may grow in size between this year versus last year, there can be huge repercussions if you cross that threshold.”

These repercussions include stiff financial penalties. If you don’t offer coverage and follow ACA requirements for employers, you will be charged $2,970 per full-time employer, excluding the first 30 employees. This amount is charged even if you provided insurance to some of your employees, so the costs can quickly add up. 

To be counted as an ALE, the ACA eligibility rules say you must have an average of 50 full-time employees working for you on average during the prior year. Your full-time workers are counted directly. For part-time workers, you add together all of the part-time hours worked during an entire month. Then, you divide this figure by 130 to get the number of full-time equivalent (FTE) workers. After calculating this figure each month, you can figure out the average FTE count for the entire year. 

Seasonal workers aren’t counted toward the ALE calculation as long as your workplace doesn’t go over 50 workers for more than 120 days per year. This day requirement doesn’t have to be consecutive. For example, the days worked planting and harvesting by agricultural workers during the spring, summer, and fall could end up adding up to more than 120 days.  

The Look-Back Method: Using Measurement Periods and Stability Periods 

When determining your ACA compliance requirements, you can use the look-back method to figure out which employees should get coverage. This method involves measurement, stability, and administrative periods. While the length of the measurement period can vary, it must be the same for every worker. Often, workplaces use measurement periods that are between 3 to 12 months in length.

During the measurement period, you must track each employee’s hours. When the measurement period ends, you average out these hours to see if they qualify as a full-time worker. If they do, the ACA gives you an administrative period to determine eligibility and offer coverage. Then, workers can receive health insurance during the stability period.  

Preparing for Year-End Filings 

After each year, you must submit Form 1095-C for each employee as well as a Form 1094-C summary to the IRS. To prepare for these year-end filings, there are a few things you can do. The following information will be necessary to complete all of the ACA reporting requirements for employers.  

• Business contact information
• Employer identification number
• The contact details for a key contact at the company
• Your total number of workers each month
• Your total number of full-time workers each month
• The average hours each employee worked during each month
• The kind of insurance you offered
• Proof that you offered insurance to at least 95% of eligible workers 
• The monthly cost of minimum value insurance you gave each worker
• Whether you offered insurance to your company’s full-time workers
• The Social Security numbers and names of your employees 

Prepare for Your ACA Reporting Requirements 

With payroll ACA services, you can get help calculating each employee’s eligibility for health insurance. As a business owner, you are required to meet ACA requirements for employers. No matter how small or large your company is, the right HR and payroll services can help you meet your ACA compliance requirements.   

To discover more information about the ACA and employers, reach out to Asure’s team of payroll experts today.