ACA compliance Form 1094-C & 1095-C | ACA 1095 Reporting Software

Complexities in Employer Mandate ACA

Facing the ACA employer mandate and staying ahead of its complexities is a tricky process. The IRS has enacted penalties for employers who don't provide health insurance coverage to their employees. To avoid these penalties and stay compliant with reporting under the ACA, a lot of preparations among the employer are involved.

Take a few minutes to look over the steps below for meeting your ACA requirements!

Step 1: Identifying the Right Employees

The first step to meeting your ACA reporting is to find out the number of full-time and full-time equivalent employees you have.

According to the Affordable Care Act employer mandate, employers must provide their employees with an affordable health insurance plan if they have at least 50 full-time or full-time equivalent employees. These employers are considered as an Applicable Large Employers (ALEs).

For the 2016 tax year, employers are required to offer minimum essential coverage to at least 95% of their full-time employees.

And just how are these employees determined per ACA regulations?

In order to obtain the total number of full-time equivalent employees you have per IRS standards, add up the number of hours your employees are paid throughout the year. Divide this total by 2,080 and the result is your number of full-time equivalent employees.

Step 2: Tracking Employer Mandate Requirements

Once full-time employees are determined, the next step is to track and document the necessary data required for the ACA employer mandate.

Throughout the year, ensure that all required information is available at all times and ensure that the coverage was offered to all eligible employees. Keep track of the dates you offered coverage to each employee. Also make sure that the coverage you offer meets the minimum essential coverage and minimum value requirements of the employer mandate ACA.

Managing this data throughout the year will help to simplify your ACA compliance process to easily report your forms to the IRS without any help.

Step 3: Reporting Coverage Offers

To be compliant, employers are required to complete an additional step when preparing their ACA forms. Employers must report the cost of the employer-sponsored group health plan on Form W-2 by completing box 12, which tells employees the total cost of their individual health care plan, including the employer offer.

Step 4: Explaining Coverage to Your Employees

ACA compliance is complex for employers and employees to understand, with the mandated laws and reporting forms. Employers typically need to send a copy of Form 1095 to their employees to provide information about their health insurance plan. Form 1095 helps employees review their health care plan's summary of coverage and benefits.

As an employer, if you're prepared with the right information for your ACA compliance, then there's no need to worry about the aca reporting process.

If you're an employer and are ready to meet ACA compliance standards and report to the IRS under sections 6055 and 6056,

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