December 2017 Focus
"Pay or Play?" – Shared Responsibility for Employers under ACA's Employer Mandate
In 2015, the ACA began requiring applicable large employers (ALEs) to offer affordable health coverage to their full-time employees. Any who fail to provide coverage and at least one full-time employee receives a premium tax credit to help purchase coverage through the Health Insurance Marketplace will owe a harsh penalty. Now, the IRS is officially sending out penalty letters to ALEs that owe for calendar year 2015. There are two potential penalties that could be imposed for failure to satisfy the mandate, both of which are steep in cost and non-deductible for tax purposes.
ALEs that receive a Letter 226J will have an opportunity to contest any proposed penalty notices, but will have only one shot at it. So, if you receive this letter, we highly recommend you hire an attorney immediately for proper counsel on how to respond. If you choose to appeal, it is important to provide any-and-all documentation in support of your appeal. Do not try to tackle the response without proper counsel. If you can't prove your case with the proper documentation, you will, in fact, pay the penalty.
Note: To determine if you are an ALE, you must be proactive with your employee counts. Simply put: If you issue more than 50 W-2s in the previous calendar year, an employee count for that year should be on record. First time ALEs, luckily, have a 90-day grace period, from January 1 – March 31 each calendar year, to report as such, with a deadline of April 1 each year to provide coverage.
2017 ACA Reporting
It is easy to get lost in the confusing numeric labels given to the ACA's reporting requirements. To simplify, here is what is generally required of employers:
- Regardless of whether sponsoring or participating in a fully insured or self-funded plan, employers will complete the "C" reporting. "B" reporting is for insurance carriers (with some exceptions).
- ALEs must submit ACA information reporting forms to the IRS annually by Feb. 28, or file electronically by March 31.
- Employers will complete Form 1095-C for each full-time employee. They are required to distribute the forms to full-time employees (very similar to Form W-2 requirements and on the same distribution schedule) by Jan. 31 of each year.
Employers will transmit all individual 1095-Cs to the IRS along with Form 1094-C. (Think of 1094-C as a cover sheet.)
Sexual Harassment – Or is it?
Considering the many sexual harassment claims making the headlines lately, now is not the time for outdated anti-harassment procedures in the workplace. It is important for employers to be mindful of the following:
- Be aware of all forms of harassment, per the DOL
- Review current anti-harassment policies.
- Ensure effective procedures are in place.
The EEOC has established minimum standards and guidelines for employers to reference when developing anti-harassment and complaint procedures. To view these tips, click here.
Of course, prevention is the best tool to eliminate harassment in the workplace. Communicate to employees that sexual harassment, or any other form of harassment, will not be tolerated. Update your anti-harassment policy. Implement annual training on harassment prevention, whether it be online or in the classroom, and include all individuals of the company, from the top down. Establish an effective complaint and investigation process, and take immediate action when an employee reports an incident. By following this process, employers have an opportunity to stop inappropriate behavior before it reaches the level of illegal harassment, and avoid civil or criminal penalties.