With the passage of the new tax law came the repeal of the individual mandate, which will go into effect January 1, 2019. The employer shared responsibility mandate was not affected by the tax bill, and it is not likely to go anywhere anytime soon. The IRS has already begun assessing employer shared responsibility penalties (ESRP) for the tax year 2015. The IRS Letter 226-J assessment notices are set to continue for future tax years. As we complete and move beyond 2017 reporting, employers will once again need to shift their focus to 2018 ACA compliance.
For 2018, and future years, employers must continue to:
- Provide affordable coverage that provides minimum value to 95% of full-time employees for each calendar month of the year.
- File accurate and complete Forms 1094 and 1095 with the IRS, as well as provide timely and accurate employee statements (Form 1095) to employees.
- Actively manage employee eligibility and compliance under the employer mandate.
Important note for controlled groups (i.e., companies that have multiple common ownership or parent-subsidiary relationships): All companies in a controlled group are considered a single employer for the purpose of ACA reporting. Therefore, it’s important to maintain compliance for all the included entities within the group to avoid penalty risk.
Key ACA Parameters and Penalties for 2018
*Employers who correct reporting errors or submit returns before August 1, may reduce their potential per form penalties.
Why you Should Pay Attention
Now that the IRS has begun assessing penalties for the first mandatory reporting year (2015), becoming a proactive participant in maintaining your company’s ACA compliance is now more critical than ever. Letter 226-J, distributed by the IRS and received by numerous employers, has included a reporting assessment of more than $10 million in penalties for some individual employers! Employers were likely unprepared to receive and respond to this notice of sizable potential fines.
Without a system that manages data aggregation and evolving rules and regulations, the challenges employers face will continue to compound.
It’s important to remember that this risk can be managed. Selecting a vendor who provides a system, tools and support to manage end-to-end ACA compliance is one of the most important decisions a company can make today. Not all ACA solutions have figured it out. The good news is, Health e(fx) was built from the ground up to overcome this challenge.
Health e(fx) continues to closely monitor changes to the ACA and reporting requirements, and will keep you updated on healthcare reform. Our system was specifically designed to adapt to continuously changing healthcare regulations, and to handle even the most complex data sets. We’re leading through change, providing you with data insights that will help you make the best decisions for your business and your employees.