Simple ACA Rules for Simple (But Not Small) Employers
You’re an ACA “Applicable Large Employer,” but not by much. You have three executives, none of whom has any HR or benefit plan expertise. You rely on a local payroll service and your insurance agent. You hope they are on top of things, but you worry. You should worry. Generalizing greatly for simplicity’s sake, here are some icebreakers you might use to open conversations with your advisers.
50 to 100 Employee Transition Relief
If you had at least 50 but less than 100 full-time employees (on an aggregated basis, including full-time equivalents) in an average month in 2014, then you are an ACA “Applicable Large Employer” with ALE reporting obligations (Code § § 6055, 6056) and employer mandate tax exposure (Code § 4980H). However, if you properly file your Forms 1095-C and 1094-C by February 29, 2016, and check Box C on Form 1094-C, you may be granted “transitional relief” from the employer mandate taxes that accrued in 2015 if you failed to offer affordable, qualifying coverage to all your full-time employees and their dependents.
If your 2014 average month’s full-time employee number was 100 or more, you are not eligible for this relief and it’s too late to get small.
2015 Coverage Offer Reporting
The only employers exempt from this are small employers with no group health plans and small employers with only fully-insured group health plans. Small, self-insured employers report under Code § 6055. All Applicable Large Employers report under § 6056 and, if self-insured, also have obligations under Code § 6055.
By February 1, 2016, you must furnish a Form 1095-C to each person who was your ACA full-time employee in any 2015 month. By February 29, 2016, you must file all those Forms 1095-C with IRS (March 31 if filing electronically), along with a Form 1094-C cover sheet. You’re unlikely to be able to do this without IT tools that have been developed by TPAs and benefit plan consultants over the past year. Some of them are requiring that system installation, configuration, data loading and testing be completed by October 15, 2015. If you haven’t engaged one of them yet, prioritize this project. You will not appreciate how much work must be done until you start doing it.
The 2015 Forms and Instructions will be published, we hope, in September 2015. Here are the 2014 links:
Form 1094-C ;
Form 1095-C ;
State and Local Government Employers and Plans
The most thoroughly busted ACA myth may be the rumored exemption of state and local government employers and their group health plans. There are important ERISA exemptions for such plans but ACA employer mandate taxes and coverage offer reporting requirements are fully applicable. They are enforced independently and may be financially significant. Want to get some attention from your higher-ups? Ask from what accounts the accruing taxes and penalties are to be paid beginning in mid-2016.