Companies across the country are preparing to file their Affordable Care Act documents with the IRS by the pre-determined deadline. However, with the new year came updates to the regulation and the requirements companies must follow. Let’s take a closer look at some of the alterations affecting ACA reporting in the new year:
“The number of workers that constitutes a small employer has changed for 2016.”
Definition of employers altered
Perhaps one of the biggest alterations to the ACA is the difference between the definition of a small and large company. Until Dec. 31, 2015, the former was a business with one to 50 full-time equivalent employees. Now, organizations with one to 100 FTEs will be considered a small employer. Those with less than 50 workers will not have to provide insurance, while those businesses with 50 or more employees will be considered an applicable large employer. To avoid costly penalties, these ALEs must provide affordable minimum essential coverage to 95 percent of their FTEs.
Reporting deadlines extended
Both small and large employers are obligated to notify the IRS of the health care coverage they provide for full-time equivalent workers. While the former must use forms 1094-B and 1095-B, the latter must fill out 1094-C and 1095-C. The new deadlines for these documents are as follows:
- Forms 1095-B and 1095-C must be distributed to employees, for personal tax purposes, by March 31. The original date was Feb. 1.
- Forms 1094-B and 1094-C must be submitted to the IRS by May 31, if filed by paper, and June 30, if electronically. The initial deadlines were Feb. 29 and March 31, respectively.
Plans must include embedded maximum out of pocket for 2016
In 2016, any health plans that did not have participants prior to when the ACA was created – March 23, 2010 – will have to apply a embedded maximum out-of-pocket cost to all employees enrolled in family or self-only coverage. This means that plans will have to pay at 100% for workers as soon as their individual cost sharing expenses meet or exceed the IRS limit for self-only insurance, which is $6,850 for 2016, according to The Society for Human Resource Management.
There are many substantial changes regarding ACA requirements taking effect in 2016. It’s crucial for companies and their HR teams to be aware of these alterations and how they affect both their organization and workers.Contact us to learn about the ACA and payroll, HR, HCM, and benefits services