Strengthen Your Ability to Manage the ACA’s “Weak” Penalty B

You are one of the fortunate ones with an ACA plan prepared for 2015.  You have your minimum essential coverage plan or minimum value plan in place.  You know your waiting period can’t exceed 90 days (following a bona fide orientation period of no more than one month, of course!).  Your timekeeping system is tracking leaves of absence, breaks in service, and the rule of parity.  Your 6055/6056 reporting is squared away and you are ACA ready!

You have done a lot in 2014 to be all squared away for January 1, 2015 and should give yourself a pat on the back if no one else has!  Now, it’s time to consider how you are going to strengthen your ability to manage the “(b)” penalties that most ALE’s (applicable large employers) will be subject to as part of the Employer Shared Responsibility provisions.  It is still a bit of a mystery as to when and how employers will be notified of their “(b)” penalties, but here is what current HHS & IRS guidance and information tells us:

  • The open enrollment period for 2015 for the health insurance exchanges is 11/15/14 to 2/15/15.  HHS data for 2014 enrollment showed that 85% of enrollees received some form of subsidy.
  • The exchanges are responsible for sending out notifications to employers alerting them of employees receiving subsidies.  This is expected to occur sometime mid-2015, but the timeframe and format are still up in the air.  HHS states that the notification may be sent on a per employee basis or a listing of a group of employees that have received a subsidy.
  • Employers will have 90 days to appeal subsidy eligibility notifications.  The employer will have to submit documentation to HHS or the state exchange supporting their appeal (offer of coverage, wage data supporting affordability).
  • While the HHS alerts employers to possible “(b)” penalties, the IRS actually levies the Employer Shared Responsibility fines.  Employers will likely not know their full ACA tax liability until after April 2016.  The “(b)” penalty will be assessed after employees have filed individual tax returns claiming their health insurance tax credits and employers have filed their 1094c and 1095c reports documenting their full time employees and benefits offered.

There are a lot of good reasons to find partners who understand ACA compliance management even with a solid ACA strategy in place.  If you aren’t one of the fortunate ones, that has this extremely challenging, constantly changing law all figured out, don’t worry.  You are far from alone.  MaxServices has compliance and cost management solutions for companies at every stage in their ACA planning.  Come by and talk with us at Staffing World 2014 at booth #1028.