The recent failure in the U.S. Senate vote to repeal the Affordable Care Act (ACA) leaves in place the ACA’s employer mandate. The employer mandate applies to businesses with 50 or more full-time or full-time equivalent employees, referred to as Applicable Large Employers (ALEs). As Congress was debating and ultimately failing to repeal the ACA, the IRS was moving forward with its plans to enforce the ACA and preparing for mandated information filings of 2017 tax year information in 2018.
At this stage, it’s difficult to say how many ALEs are out of compliance with the ACA. A nationwide survey of businesses conducted in 2016 by Zywave, a software provider for insurance brokers and financial planners, might provide some insights.
The study found just over a third of employers surveyed didn’t know what ACA information was needed to be reported to the IRS. Less than 50 percent of those responding to the survey were confident in their ability to satisfy ACA reporting requirements, another 45% were somewhat confident, and 6% were not confident. “Many employers are confused about what information needs to be reported and how to accurately submit this information,” stated the survey.
So how should this be interpreted? When it comes to the ACA, there are still employers who are admittedly clueless on what is required. There remains a knowledge gap on the importance of information reporting as it pertains to the ACA and its enforcement by the IRS. Should your company fall into the “unsure” category, run, don’t walk, to find an expert in ACA mandates and IRS reporting requirements. It will save you money down the road.
Our message: If you were among the companies following the Congressional debate betting that the whole employer mandate thing would go away, you bet wrong. Now it’s time to get with the program if you have not already done so. Businesses with 50 or more full-time or full-time equivalent employees that have not filed their 2015 or 2016 tax year ACA information with the IRS should file as soon as possible using IRS Schedules 1094-C and 1095-C to minimize potential IRS penalties, including the doubling of those penalties for willful failures. If you haven’t begun tracking the ACA-related data for the 2017 tax year for filing with the IRS, now is a good time to start. Regularly tracking your data will help you address the five most comment challenges organizations face when complying with ACA requirements.
