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How The Affordable Care Act Affects Non Profit And Government Employers

Posted by Zobrio on July 31, 2015

It’s the question that has been repeated by nearly every one of Zobrio’s accounting support clients – “How does the Affordable Care Act (ACA) affect my office?” If we had to guess, you’re probably wondering the same thing. While the short answer to that question is “it depends” what is definitely going to affect everyone is an increased amount of time to prepare reports for your year-end close out.

Before beginning any reports you obviously need to determine if the ACA applies to your organization. In almost all cases it will. The main factors include:

  • 50 or more Full-time Employees including Full-time Equivalent (FTE) Employees
    • Determined on calendar year basis
    • Uses employee headcounts from the preceding calendar year
  • Full-time employees defined as those working an average of 30 hours of service per week for the month or 130 per month

If that applied to you (it probably does) the next step would be to begin gathering information to include in your reports to the IRS. The ACA has a formula to show a specific standard of healthcare that employers should be providing. When filing with the IRS, employers will be required to meet a ‘minimum value’ of coverage, and ensure that coverage is not ‘unaffordable’ i.e. no more then 9.5% of total income. So other than the background information on the employee, the following must be reported:

  • Health Coverage offered
  • Employee Share of the Monthly Premium (for lowest-cost self-only minimum coverage)
  • Months the employee was enrolled in employer coverage
  • Affordability Safe Harbor Information

Now where this gets tricky is the determination of some of these numbers. The IRS is expected to provide more instructions as the end of the year gets closer, but as of this writing there are assumptions allowed to nail down some of the required information in the report. It may be best to contact your chosen accounting software provider to get support for creating the reports.

As for the forms and reports themselves, they are available in somewhat of a draft form on the IRS website now. To ascertain what forms you’ll file as well as the deadlines see the following charts:

 

Fully Insured

Self-Funded

 

< 50 FTE’s

> 50 FTE’s

< 50 FTE’s

> 50 FTE’s

Form(s) to employees

 No reporting requirements for 2015

1095-C
(Parts I & II only)

1095-B

1095-C
(All Parts)

Form(s) to IRS

 No reporting requirements for 2015

1094-C
(with copies of all forms 1095)

1094-B
(with copies of all forms 1095)

1094-C
(with copies of all forms 1095)

 

DEADLINES FOR ACA SUBMITTAL

Due Date

    Requirements

February 1, 2016

    1095-B / 1095-C due to recipients / employees

February 29, 2016

    1095-B / 1095-C and 1094-B / 1094-C paper filing due to IRS

March 31, 2016

    1095-B / 1095-C and 1094-B / 1094-C eFile due to IRS

 

Finally, why not just ignore everything associated with the ACA? Well, the IRS has already thought of that… One of two consequences will occur:

  • An Excise Tax would be assessed if coverage is not offered
    • $2,000 per year times the number of full-time employees minus the first 30 employees
  • If coverage is offered, but does not meet the minimum value (cover 60% of the health insurance premium) and affordability, there may be an Excise Tax of $3,000 times the number of full-time employees who purchase insurance on an exchange and receive a premium tax credit.

Don’t worry. You’re not the only office confused by all this. The ACA has a lot of organizations scrambling to ensure deadlines are met and proper reporting is followed. Add to that the fact that much of this may change as the IRS simplifies processes or realizes that some of this information may be hard to come by for employers. That said, Zobrio is recommending that all financial officers contact their accounting software support provider to reserve year-end closeout help as early as possible this year. We’re expecting 2015 reporting to take twice as long as usual and will begin booking support time as early as October. If you don’t have dedicated accounting support, consider reaching out to your favorite accounting support service that is providing ACA help.

Please note that Zobrio specifically supports Fundware, Financial Edge or Abila MIP. To reach out to us for software or support, contact us or call Matthew Kreutzer at 314-732-4756

 

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