Let’s get one thing straight - everyone is confused by the new Affordable Care Act (ACA) rules and regulations. Everything from the forms, the codes, who is and isn’t eligible for coverage. It’s all just a little too much to keep straight - especially for those of us who are walking the line between an applicable large employer (ALE) and being under 50 full time equivalents (FTE). If you 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 or not. 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, work 30hr/week, or 130hr/month on average will require a qualified offer.
Using Software to Track Your Forms
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. Using a software ensures your 1094s and 1095s are accurate and filed on time.
Filing Your Forms at Year End
Lastly, check with your software provider to see who is responsible for submitting your 1094-C and 1095-C at year end. Many SaaS providers will file these forms on your behalf for a small fee. This will ensure your compliance and take the liability off of you. Failure to file can be extremely costly for your businesses. Depending on your circumstance 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 click here.