With all the recent changes to employment due to the global pandemic, navigating ACA compliance can be challenging. ACA noncompliance may lead to shared responsibility payments. Businesses with 50 or more full-time employees must offer affordable, minimum essential health coverage.
The first step to avoiding potential shared responsibility payments is to make sure your business stays compliant with the ACA shared responsibility requirement. While this may seem simple, there are few distinctions to be aware of, including determining full-time employment status and full-time equivalents and identifying the minimum value requirements.
If a full-time employee receives a premium tax credit because they were not offered coverage, the coverage was not affordable, or the minimum value was not provided, the employer may also be subject to a shared responsibility payment.
Applicable Large Employers (employers with 50 or more employees) are required to file information returns with the IRS, Forms 1094-C and 1095-C. These forms will inform the IRS of the employers that owe shared responsibility payments.
If you do receive a shared responsibility payment letter from the IRS, the employer has 30 days to respond. If you do need more time to gather your information, the IRS may be able to extend the 30 days deadline. Either way, be sure to respond or ask for an extension as quickly as possible.
If you are required to pay a shared responsibility payment be sure to consult a lawyer to ensure your reporting is accurate. At SBMA, we want to ensure you remain compliant with all ACA requirements. If you receive a letter from the IRS in 1094/1095 filing that we completed, we will refile your forms, free of charge.
Contact us today to learn more.
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