ACA compliance is critical to avoid fines and penalties. Baron Payroll houses all your data – dates, employee status and more – in a single source and can produce reports for your ACA compliance. Accurate workforce data is vital to your compliance.
The reporting requirements that the ACA imposed were difficult for many employers to meet. If your ACA process last year didn’t go as smoothly as it could have, now is the time to look for a better solution. Employers that do not have a solution for collecting and managing the necessary employee and benefit data to satisfy Section 6055 and 6056 reporting requirements run a significant risk for incurring reporting penalties and ACA excise taxes.
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Companies that employ 50 or more full-time equivalent employees are defined as an Applicable Large Employer (ALE). The employer mandate requires all ALEs to offer minimum essential coverage that is both affordable (9.66 percent of the mainline single Federal Poverty Line) and provides minimum value (policy pays 60 percent of the costs) or face a penalty called the Assessable Payment (play or pay). This coverage must be offered to all full-time (FT, defined by total hours of service) employees and is determined by using either a monthly or look-back measurement period.
If ALEs offer FT employees coverage deemed unaffordable (at least 9.66 percent of the mainline single Federal Poverty Line divided by 12 for the least expensive employee-only, compliant plan) or doesn’t provide minimum value (the plan’s share of total cost of benefits under the plan is less than 60 percent), the employers may face a penalty of $3,240 times the number of FT employees receiving a subsidy for exchange coverage. Employers who file incorrect forms may be subject to a fine of $50 per form up to $529k annually.