Let’s call a spade a spade - the Affordable Care Act (ACA) rules and regulations are confusing. From the forms, to the codes, to who is and isn’t eligible for coverage is all just a little too much to keep straight. This is especially true for those of us who are walking the line between an Applicable Large Employer (ALE) and being under 50 Full Time Equivalents (FTE). (As if we needed more acronyms to remember.) If you’ve been living under a rock and haven’t heard these terms by now, rest assured they will soon become part of your daily life. So, what can we do to make sure we’re remaining compliant? That is where software comes into play.
First Things First, Are You an ALE?
Before you do anything with the ACA, you’ll need to determine if you are, in fact, an ALE. According to the IRS, an ALE is an employer who has at least 50 Full Time Equivalents on average during the reporting year. An FTE calculator will determine whether or not you are an ALE, and if you need to extend insurance coverage to your employees. Keep in mind, even if you are an ALE this does not mean every employee needs to be offered health insurance; only those employees who are considered full time, (as in they work 30 hours per week or 130 hours per month on average) will require a qualified offer. Confused yet?
Depending on the size of your company, you might have several people inputting codes and keeping track of your FTEs. Making sure your entire HR or payroll department has access to this function will alleviate some of the stress and also ensure that everyone is on the same page for who is considered eligible for insurance, who was offered insurance, and so forth. One of the most important components of remaining ACA compliant is tracking your employee count and health care eligibility. Failure to file and comply can result in penalties and fines. Using a software ensures your 1094s and 1095s are accurate and filed on time, every time.
The last thing you want to do is check with your payroll and HR software provider to see who is responsible for submitting your 1094-C and 1095-C at year end. Many software as a service providers will file these forms on your behalf for a small fee. This will ensure you’re staying in compliance and take the liability off of your business, as failure to file can be extremely costly. Depending on your circumstances, you could pay anywhere from $100 per return up to $1,500,000 in total penalties for the calendar year. Once you add up all eligible employees, COBRA participants and retirees, you can see how this figure can add up quickly. Putting the filing responsibility on your software provider can ensure peace of mind and a penalty-free year end.
The above examples are just a few reasons how software can assist in your ACA efforts. For more information on how software can simplify ACA compliance, request a demo of Dominion’s ACA software below!
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