The Affordable Care Act (ACA) has ushered in major changes in workforce planning and management for numbers of employers. Because continued changes in the regulations and for your employees are inevitable, maintaining compliance will become increasingly challenging and complex.
When the smallest error can result in significant penalties it is imperative to have the right infrastructure in place to manage the ACA compliance effectively.
The Three Compliance Components of the Affordable Care Act
For HR professionals, 2015 brought a new ACA compliance hurdle. Employers subject to the employer shared responsibility mandate, or “Play or Pay”, will be required to comply with the reporting requirement component of the ACA "compliance trifecta", along with health coverage information reporting and full-time status determinations. All of this has put added pressure on employers of all sizes.
Jim O’Connell, Ceridian Washington insider and executive consultant, noted, “Employer reporting represents one of the three pillars of ACA compliance – along with the mandate to offer affordable and minimum value coverage and to determine full-time employee status.”
Staying On Top of ACA Compliance
By giving employers a notice of the specific information they need to collect and report, the IRS hoped to give employers sufficient time for implementing processes for data collection which was to begin starting January 1, 2015.
The IRS will use employers’ Section 6055 and 6056 reports To enforce the so-called “Play or Pay” mandate,. Section 6055 requires sponsors of self-insured group health plans and insurance issuers to report on individual enrollments in minimum essential health coverage.
Section 6056 requires employers subject to the “Play or Pay” mandate to report on health coverage offered to full-time employees and their dependents, including information such as each full-time employee’s dollar share of the lowest cost monthly premium for self-only coverage.
This inforgraphic from CalChamber offers a flowchart approach to determining your employer compliance obligations:
ACA Compliance Steps You Should be Taking
Because of the complexity of the new information reporting requirements, McGladrey LLP advises that employers should take the following actions:
• Learn about the new information reporting requirements and review the IRS reporting forms.
• Develop procedures for determining and documenting each employee's full-time or part-time status by month.
• Develop procedures to collect information about offers of health coverage and health plan enrollment by month.
• Review ownership structures of related companies and engage professionals to perform a controlled/affiliated service group analysis.
• Discuss the reporting requirements with the health plan's insurer/third-party administrator and the company's payroll vendor to determine responsibility for data collection and form preparation.
• Ensure that systems are in place to collect the needed data for the reports.
A trusted resource for your HR needs
An updated and streamlined reporting strategy will help your organization meet its obligations, while providing accuracy and timeliness. So take time to understand the law and prioritize accurate record keeping. In this way, you will make compliance a sure thing.
Another key step in maintaining HR compliance and increasing your company's cost-effectiveness is to consider outsourcing. A professional agency such a Accuchex can provide much-needed help with Human Resources needs and questions. Accuchex is a full spectrum Payroll Management Services provider offering expertise in Time Management, Insurance and Retirement issues, as well.
If you are looking for reliable resource for your HR issues, we can help. And you can get your Free Download: Payroll Outsourcing Guide to help you make an informed decision, or call Accuchex Payroll Management Services at 877-422-2824.