Pandemics, Politics and Insights into ACA Trends and Penalty Risk

Pandemics, Politics and Insights into ACA Trends and Penalty Risk

As American companies settle into their “new normal” after a tumultuous two years, a lot of uncertainty remains. Companies have experienced layoffs, furloughs and outright shutdowns. Employees in some industries have seen their hours and pay reduced, too. Now, the economy is bouncing back and demand is skyrocketing, even as the hiring market is the tightest it has been in recent memory. For HR in those companies, that’s a lot of moving pieces to keep track of.

Amidst all of this, have you taken a fresh look at your ACA compliance?

If you’re like many HR pros, the answer to that question may be a chagrined “no.” You likely have your hands full getting people back to work, figuring out new policies dealing with remote work vs. office time, and everything else on HR’s plate right now. Compliance might be the last thing on your to-do list, but that could be a costly mistake.

Our 2021 Insights Report, “Pandemics, Politics and Insights into ACA Trends and Penalty Risk can help with that. It contains the latest data and information about the ACA to help you stay on top of health reform and your compliance needs. The report is an in-depth look at the newest information related to the ACA, focusing on data across a wide range of industries.

Here’s a summary of what you’ll find in this important report.

Why employers should pay attention to their ACA compliance now
In addition to workforce upheavals, four additional factors could cause America’s corporations to face tens of millions of dollars in IRS penalties for not complying with the ACA’s Employer Shared Responsibility Provisions (ESRP).

      • The IRS has announced plans to sunset its “good faith reporting relief” after tax year 2020.
      • The Treasury Inspector General for Tax Administration is placing public pressure on the IRS to collect more in ACA ESRP penalties.
      • The Biden administration is proposing a $1.2 billion increase in the IRS budget to ensure corporate and individual compliance with tax laws.
      • The IRS has declared that there is no statute of limitations for ACA ESRP.


What it means for companies: Greater enforcement and penalty risk
In the months ahead, you can expect greater ACA penalty enforcement. It will be more likely you’ll receive a 226-J proposed penalty assessment letter. The first thing to do when you get that unwanted piece of mail is to respond within the required timeframe. But, wouldn’t it be better to take some time now and focus on your compliance, so you don’t get red-flagged in the first place?

Key takeaways from the 2021 Insights Report

Here are three critical takeaways from the 2021 Insights Report:

      1. Expect greater ACA penalty enforcement.
        With a pro-ACA White House, the likely sunsetting of the good faith relief, and no statute of limitations for employer penalty enforcement, employers must prepare to respond promptly to 226-J proposed penalty assessment letters.
      1. Ensure accurate eligibility measurement to avoid Penalty A.
        With today’s changing workforce, be sure to correctly measure eligibility for those with variable hours and changing status and offer coverage to over 95 percent of your full-time employees, as defined under the ACA.
      1. Ensure your health care coverage is affordable to avoid Penalty B.
        With more employees becoming eligible for subsidies on the public marketplace, and an increase in marketplace enrollment, employers should focus on ensuring their lowest cost plan is affordable for their employee populations under the ACA.

At Health e(fx), we get it. Complying with the ACA is complicated and fraught with risks, even for the well-intentioned company. We are dedicated to helping companies navigate the complexities of the ACA. Download the 2021 Insights Report today for a more in-depth look at this important issue.