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With the IRS expected to continue to ramp up enforcement of the ACA’s Employer Mandate this year, employers should recognize the importance of a monthly ACA compliance process. Here’s why:
One of the most critical reason for implementing a monthly ACA compliance process is that it provides a running record of the offers of coverage extended to your workforce. Each month you can account for offers of coverage extended as well as which employees enrolled or declined in the coverage. When this process takes place on a monthly basis, it becomes much more efficient.
In addition, the monthly ACA compliance process identifies employees that become eligible in advance of their actual eligibility so that your organization can prepare the necessary documentation to extend the offer on time. With a monthly ACA compliance process, you can expect to never miss an offer of coverage moving forward.
Finally, by incorporating a monthly ACA compliance process, you are in a better position to cross-reference the information contained in IRSpenalty letters, such as the Letter 226J, with your own records. The IRS is currently issuing Letter 226J penalty notices to employers identified as having failed to comply with the Employer Mandate for the 2017tax year.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
Employers, if you are interested in implementing a monthly ACA compliance process, contact us to learn about ACA CompleteSM.