With the ACA not going anywhere in 2019, now is a good time to make sure your ducks are in a row for ACA compliance this year. Here’s some tips on how to stay compliant.
Quick reminder: Under the ACA employer mandate, ALEs (Applicable Large Employers) must periodically (usually monthly) offer at least 95% of their eligible full-time employees quality health insurance coverage, and fulfill all ACA reporting requirements around that, or risk paying penalties.
Minimum Value (MV): the plan must pay at least 60% of the costs of covered benefits
Affordable Coverage: A plan is considered affordable if the employee’s required contribution for the lowest cost self-only health insurance option offered by the employer in 2019 does not exceed 9.86%* of the employee’s household income. This applies even if the employee selects a different health insurance coverage option.
(*9.86% is for 2019. This percentage typically changes each year).
Here are 3 things you can do all year long (start NOW) to stay compliant and make 2019 reporting a breeze:
1) Make sure that you are allowing your ACA eligible employees to enroll into your employer-sponsored plan in a timely fashion.
2) Make sure the plan you offer to every eligible employee is affordable for that employee.
Stay compliant by using our 2019 Affordability Calculator to find out whether your health care plan is affordable for an employee using any of the three safe harbors.
3) Stay vigilant around IRS love letters.
Now that the ACA filing season has come to a close, we anticipate that the IRS will start their next round of sending penalty assessment 226J letters to employers. The hope is that you do not receive one of these letters. However, if you do, your first question will most likely be: “We complied with the ACA so why are they sending this to us”?
In most situations, we have found that the cause of the proposed assessed penalty falls in one of three areas:
Failing to mark the 1094-C as “Authoritative” when sending forms to the IRS.
Failing to indicate that minimum essential coverage (MEC) was offered in Part III column (a) on Form 1094-C.
Having 1 or more employees obtain a premium tax credit from an insurance exchange while employed by you, yet you offered compliant coverage to the employee, which they waived.
All of these situations are correctable in your response to the IRS. Thus, the best advice we can give you should you receive one of these letters:
Engage a qualified individual to help you formulate your response.
Again, the main advice is to remain calm and work towards formulating your response which will be due to the IRS within 30 days. Also, feel free to reach out to our Customer Care team should you want to have a conversation about your specific 226J. We would be happy to review your ACA filings with you and provide a referral to a qualified ERISA attorney that can facilitate crafting an effective response, if needed. You may also want to check out our helpful blog, “How to avoid a love letter from the IRS: a 226-J Preventative Checklist.”
Stay Compliant with Integrity Data
You’ve got the information, now you just need the right tools for the job. Integrity Data’s ACA Compliance Solution and Services are reliable, comprehensive, secure and affordable in order to meet the needs of most businesses, big and small. You also get the benefit of having our ACA subject matter experts just an email or phone call away. Contact us to learn how you can get started.
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