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2016 ACA Compliance Planning Checklist

Now that the new Affordable Care Act (ACA) rules are out, it is important to identify the actions your organization needs to take to proactively and efficiently plan for the 2016 IRS deadlines. Understanding the requirements and how they impact benefits programs is crucial to the success of 2016 ACA compliance reporting. Here are some things to keep in mind as you begin your data gathering process:

No Guaranteed IRS Extensions

For 2016 reporting, organizations must send forms 1095-B and 1095-C to workers by January 31, 2017. Forms 1094-B, 1095-B, 1094-C, and 1095-C must be submitted to the IRS no later than February 28, 2017 if filing on paper, and by March 31, 2017 if filing electronically*. It’s crucial for companies to stay on top of these dates and check with the IRS as the due dates approach to ensure there haven’t been additional changes.

There Are New Forms

The IRS provided drafts of 1094-C and 1095-C forms for the 2016 tax year. Most of the form remains the same, but there were a few changes to note. The code denoting transition relief has been removed and codes for conditional offers of coverage to spouses added. This will complicate the already challenging code assignments.

Compliance Threshold Increased

For 2015, large employers were required to prove 70% of their eligible employees were offered healthcare coverage. Beginning in 2016, the employer mandate will increase to 95%.

Coverage Penalties Are Getting Steeper

Which penalty do you want to avoid? Penalty A or Penalty B? Or both? Penalty A refers to eligibility coverage. If an employer does not offer coverage to 95% of its full-time employees they will be assessed a fine of $2,160 per employee. This is an $80 increase over 2015. Penalty B is assessed when an employer fails to offer affordable insurance. That penalty has increased to $3,240, up $120 over 2015.

*Companies with over 250 reports must file electronically.

Delinquency Penalties Still Exist

Not only can you get fined for failing to provide coverage, you can also get fined for failing to file or provide correct payee statements. This isn’t new this year, but the IRS was more forgiving for the 2015 filings —you can’t expect the same for 2016. Penalties are $250 fine per statement (with a $3 million penalty max) for failure to provide forms to employees, and/or for failing to file with the IRS.

Affordability Gets Redefined

The cost of affordable coverage compared to the poverty line has increased. In 2015, the contribution of an individual for their healthcare coverage could not exceed 9.56% of their household income. That number has now increased to 9.66%. That number is expected to creep to 9.69% in 2017 reporting.

Updated Summary of Benefits and Coverage (SBC) Template

The Department of Labor, along with the Department of Health and Human Services, has updated the SBC template to provide more clarity to plan participants. Employers should adopt this new form for health plans beginning on or after April 1, 2017.

Employer Shared Responsibility Transition Relief Gone

The previous transition relief for the Employer Shared Responsibility payment for large employers with more than 50 full-time employees expires on January 1, 2017. Flex contribution and grandfathered plans are also expiring. This means that come January 1, 2017 all plans must be ACA compliant.

Getting Expert Help

Most organizations simply do not have the staff or expertise they need to handle ACA compliance throughout the year. HR and benefits administration teams are experts when it comes to their organization’s employees and coverage, but they aren’t ACA experts. Given the new changes for 2016 reporting, staffers may dread handling ACA compliance despite the need for monthly reporting. The good news: there is a way to get the help needed by working with an expert. An ACA compliance expert can help employers implement a reliable month-by-month system of record that captures the compliance data they need, when they need it. The result is a better reality—one with streamlined, accurate, year-long reporting that dramatically lowers the risk of fines and audits.

ACA Compliance - Solved! How can AAIM Help?

We provide a fully outsourced ACA compliance solution. Powered by our proprietary, secure software and delivered by our expert services team, our solution combines enterprise data from multiple systems of record in order to achieve, maintain, and report on ACA compliance.

We handle ACA compliance for even the most complex organizations with dedicated compliance experts, high-touch services, and purpose-built software. By outsourcing ACA compliance to AAIM, you can successfully navigate ACA compliance and reduce the burden on your staff. AAIM’s ACA Compliance Concierge Solution helps avoid the financial risk of non-compliance and protects your organization’s reputation.

To learn more about ACA Services, contact your AAIM Account Executive today.
If you do not have an assigned Account Executive, please contact our
Research and Solutions Team: 314-754-0236 or email solutions.team@aaimea.org.