Concerned about filing your ACA forms in time? No need! On December 28, 2015, the IRS extended this year’s deadlines an additional two months. If you’re an Applicable Large Employer (ALE), meaning you have 50 or more full-time employees, this buys you more time to prepare employee information for ACA reporting requirements. While the IRS had previously required employers to request an extension, the new deadlines apply automatically to everyone, regardless of any previously submitted requests.
More time is great, but early filing is always encouraged – and filing the forms is only one part of getting ACA compliant. Review the following four steps (including the new form due dates) to ACA compliance to make sure your house is in order before the deadlines hit.
4 Easy Steps to ACA Compliance
1. Determine your number of full-time/full-time equivalent employees
Whether or not your company is subject to ACA requirements is based on your number of full-time employees.
- How many employees can I have before I’m subject to ACA requirements?
- If you have 50+ full-time (FT) or full-time equivalent (FTE) employees, you are an Applicable Large Employer (ALE), which means you must follow ACA regulations.
- How does the ACA define “full-time”?
- A full-time (FT) employee is defined as an employee who works at least 30 hours weekly, or an average of 130 monthly. It’s possible for a part-time employee to meet these criteria and then they’d be considered full-time equivalent (FTE).
- How do I figure all of this out?
- Combine the number of FT and FTE employees to determine if you’re an ALE. For example, 40 full-time employees (30 hours weekly) plus 20 part-time employees (15 hours weekly) equals 50 full-time employees – this means you’re ACA eligible.
2. Make sure you provided minimum essential coverage
After determining your number of employees, if you are an ALE, you’re required to provide affordable coverage of minimum value to 70% of your full time employees (95% in 2016).
- What is considered “affordable?”
- Less than 9.5% of annual household income.
- Employers can also determine affordability by calculating 9.5% of employees’ W2 wages, hourly pay rate, or the Federal Poverty Level for an individual.
- What is considered “minimum value?”
- 60% of the total cost of an employee’s medical expenses.
3. Capture and track data to report
If you want to get ACA compliant, having the correct information above is essential. But chances are, you have a diverse workforce made up of full-time, part-time, varied hour, and seasonal employees. So, what can an employer do? Check out HR software that handles 100% of your ACA compliance for you.
4. Complete the required forms
Congratulations! Now that you’ve collected all the necessary information, you’re ready to start filling out the required ACA forms. Here are the three forms you need fill out, what’s included in them, and when they’re now due:
- Form 1094-C, Employer Transmittal
- What is included?
- Accounts for each of the following, per 2015 calendar month: Full-time employees, total headcount, whether Minimum Essential Coverage was offered, and whether an applicable 4980H “Safe Harbor” was used.
- When is it due?
- Deadline for documents to be mailed: May 31, 2016
- Deadline for document to be transmitted digitally: June 30, 2016
- What is included?
- Form 1095-C, Employee Statement
- What is included?
- Accounts for each of the following, per 2015 calendar month: Proof of offer of coverage (with code), employee’s share of the lowest cost monthly premium, and whether an applicable 4980H “Safe Harbor” was used
- When is it due?
- Deadline for documents to be mailed: May 31, 2016
- Deadline for document to be transmitted digitally: June 30, 2016
- What is included?
- Written Statement to Each Covered Employee
- What is included?
- The employer’s name, address, and contact information
- The information for the employee on the return being filed
- When is it due?
- Deadline for Statement Sent to Employee: March 31, 2016
- What is included?
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The post ACA Update: How to Prepare for the New IRS Reporting Deadlines appeared first on Zenefits Blog.