New Affordable Care Act regulations are rapidly approaching. Dec. 15, 2015 is the last day to enroll in or change healthcare plans for new coverage that is effective as of Jan. 1, 2016. Between now and then you’ll have Halloween costumes to perfect, Thanksgiving dinners to plan, and a dozen trips to the mall for holiday gifts. Running a business is more than a full-time job on its own, and complying with changing regulations and healthcare coverage mandates can be daunting. To simplify the process and help you avoid penalties or fines, we’ve compiled a brief guide to ACA compliance.
While the increased cost of this transition is inevitable, there are options to help mitigate expenses. If you don’t already provide coverage, you may be able to take advantage of the Small Business Health Options Program (SHOP) Marketplace, available to small businesses with 50 or fewer full-time equivalent employees, meaning those employees who work on average per month 30 hours or more per week, or 130 hours or more per month, for more than 120 days in a year. Not only are SHOP plans affordable, but depending on the size of your company and the average wages of your employees you may also be eligible for tax breaks as high as 50% of your employee premium costs.
Another way to save money and still comply with regulations is by using reimbursement or flex accounts to help your employees pay for healthcare costs. Flex accounts are employer funded savings accounts that employees can use to help cover certain medical expenses. Using these plans can mean tax breaks for you and your employees who are covered by your group plan.
Finally, you have a choice between private insurance marketplaces or exchanges run by states or the federal government. This allows for the very best fit for your company, managing costs while providing compliant healthcare plans for your eligible employees.
In addition to the coverage mandate, applicable large businesses with 50 or more full-time equivalent employees will have to report new information to the Internal Revenue Service. If there are two new requirements of the ACA that will catch many businesses off-guard, they are the 6055/6056 reporting requirements and the 1094/1095 forms.
- IRS Code Section 6055 applies to providers of minimum essential health coverage, including insurance carriers and self-funded plans. Section 6056 applies to applicable large employers that offer fully insured medical plans and which are subject to the ACA’s employer shared responsibility rules.
- Section 6056 requires monthly tracking of whether: (1) the applicable large employer offered full-time employees and their dependents minimum essential coverage that meets the minimum value requirements and is affordable; and (2) the employees enrolled in the self-insured minimum essential coverage offered.
- The requisite information is reported using Forms 1094-B and 1095-B (under Section 6055), and Forms 1094-C and 1095-C (under Section 6056).
Whatever route you decide to take you must choose a plan for your employees by December 15th, or be subject to a pretty steep fine: up to $3,000 per full-time employee. But don’t let that scare you – although it may feel like a big change for your business, there are cost-effective options and processes in place to help you get it all sorted out. Employees are key to your company’s success, and supporting them through this will ultimately provide support for your business overall.