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Regulation and Compliance > Federal Regulation > IRS

Midsize Employers Still Face ACA Hassles: Red Tape Wrangler

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Many of the 51-employee companies that the federal government classifies as “large” are still having some trouble with complying with Affordable Care Act coverage and reporting requirements.

Sean Cooper, director of partner management at SyncStream Solutions, a benefits compliance and reporting firm, says in a written comment that “applicable large employers” — ALEs — seemed to have an easier time meeting the employee counting and reporting requirements than in earlier years.

Many ALEs learned from what they had done wrong in the past, and they started 2018 with all of the information they needed for filing their reports for 2017 coverage, Cooper says.

(Related: New ACA Employer Requirements Continue to Roll In)

But Cooper says some ALEs are still having trouble with ACA compliance.

1 Minimum essential coverage rules: The ACA requires many ALEs to provide solid major medical coverage, or “minimum essential coverage” (MEC), with a minimum value, and with an employee out-of-pocket premium payment that’s officially classified as “affordable.”

This year, even though the MEC and minimum value regulations have been in place for several years, “many ALEs still questioned what actually qualified as an affordable plan,” Cooper says.

2. Obsolete form lines. Some ACA rules have changed, either because of the enactment of new laws or the expiration of temporary provisions in the ACA statutes.

In some cases, Internal Revenue Service form drafters failed to update the forms quickly enough to reflect the changes, Cooper says.

One example is IRS Form 1094-C. An employer uses that form as the cover sheet that goes to the IRS along with a bundle of individual employee 1095-C coverage reporting forms.

“On the 1094-C form in particular, line 22, A, B, and C only applies to 2015 and 2016 filing years,” Cooper says. “This section proved confusing for ALEs trying to figure out what had to be filled in, when nothing was required for 2017.”

3. Coordination glitches: Some ALEs had trouble because they procrastinated. But others found out, too late, that their payroll companies were gathering less health coverage data than expected, or would be less involved with the health coverage reporting than expected. In other cases, acquisitions turned non-ALEs into ALEs, and that caused unexpected reporting problems.

The administration of President Donald Trump could eventually end enforcement of some of the ACA requirements, but for now, the IRS is still enforcing the ACA requirements, Cooper says.

The IRS has been issuing penalty letters for the 2015 filing year, and some of the letters state that the recipients owe millions of dollars in fines, Cooper says.

— Read Panel: Employers Face ACA Social Security Number Error Nightmares on ThinkAdvisor.

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.