ACA Compliance for Employers

The Affordable Care Act (ACA) is a well-intentioned effort to make sure that all Americans have access to quality health care and health insurance coverage. The ACA is being implemented in phases to make sure that everyone has an opportunity to comply with the requirements. In 2015, provisions for Employer Shared Responsibility kick in.

About Employer Shared Responsibility

The Employer Shared Responsibility (ESR) provision embodies the guidelines for determining which employers are covered by the ACA play or pay mandate. Employers with at least 50 full-time employees and full-time equivalent employees are required, under ACA mandate, to offer the minimum essential coverage at affordable rates to employees. Failure to do so would lead to tax penalties that would be imposed starting 2016. On the other end of the spectrum, employees are responsible for obtaining and maintaining health insurance coverage whether this is purchased from an employer-directed plan, individual plan or Medicaid.

Employers with a minimum of 50 and a maximum of 99 full time and full-time equivalent employees would be given a reprieve on tax penalties for 2015 provided the workforce is not restructured or the health care coverage is not changed for the 2014-2015 periods. For employers with a workforce of 100 or more, a penalty reprieve is available if coverage is offered to at least 70 percent of eligible employees.

A small business health care tax credit is available to employers with less than 25 employees, paying average wages of $50,000 or better and covering at least 50 percent of the employees’ health care premiums for policies purchased from the small business health options program. The health care tax credit can be carried forward or applied as a retroactive credit.

The Recordkeeping Burden on Employers

Complying with ACA guidelines has turned into a recordkeeping burden especially for smaller employers with limited resources. Determining which employees should be categorized as FTEs or full-time equivalent and reporting time and attendance is a tedious process especially if these personnel are assigned to different work sites. Consider also that for the purpose of determining FTEs and average annual wages, part-time and contract or leased employees may have to be included.

FTE will also include employees who left their jobs terminated their employment during the calendar year, employees who opted out of the health coverage and employees covered by a collective bargaining agreement. These records are subject to compliance audits.

Solutions that Ensure Time and Attendance Compliance with ACA Provisions

Time and attendance documentation is crucial for employers that are concerned with ACA compliance to avoid penalties or to ensure eligibility for health care tax credits. Employers who have transitioned to third party payroll processing have found a viable solution to the recordkeeping issue while ensuring regulatory compliance.

Payroll processing providers, such as Wisconsin-based Integrated Payroll Services, Inc., have automated their work processes to have a better handle on time and attendance records that are crucial to complying with ACA requirements. By working with professionals specializing in payroll services, you are assured of compliance with the complicated ACA guidelines.

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