With the second year of reporting for the Affordable Care Act complete, it’s likely you’re breathing a sigh of relief. All those forms, numbers, codes, and other data have been put away for another year, and you won’t have to think about the next round of ACA compliance for at least a few months, right?
Wrong. Putting it out of mind for even a short period often turns compliance into a scramble. Add the instability surrounding health care, and you have a perfect storm of confusion waiting for you on the other side of those couple of months.
Even with two years of compliance under your belt, it’s very likely you still have some questions about what works best, what components of ACA reporting are most important, and how to navigate that tricky health care reform issue that keeps popping up in the news. Luckily, there are ways to help smooth the regular reporting — and the transition — when it comes to ACA compliance. Here’s what you should know.
Current compliance qualifications
As the ACA currently stands, reporting for the previous year takes place between January 1 and March 31. That means that the next reporting season won’t start until January 1, 2018—giving you some time to prepare, collect data, and make sure you’re complying with the law.
Three main aspects of your company and its health care must be considered during this time:
1. ALE status. In order to figure out if you should even worry about ACA compliance, you need to figure out if you are an applicable large employer (ALE). You reach ALE status if you average 50 or more full-time equivalent employees throughout the prior year. This means that for 2017, you must look at the number of full-time equivalent employees employed in 2016. “Full time equivalent,” in ACA terms, is an aggregation of the number of full-time employees, as well as the hours worked by all non-full-time employees, as determined using a mathematical equation.
2. Employees’ status. Make sure you’re tracking the hours of every variable-hour employee, as these hours will be part of the determination if an employee is ACA full-time and therefore must be offered the opportunity to enroll in affordable minimum value health care coverage. To do this, you can employ the monthly measurement method or the look back method. In most cases, the look back method would be deployed for anywhere up to 12 months. An employer would average an employee’s hours of service (including leave, paid time off, and holidays) during this time, and figure out if they worked over 30 hours per week on average. If so, they should be getting an offer of company health care for the year. This can also be simply tracked month by month using payroll.
In the simplest terms, you need to offer your ACA full-time employees health insurance of minimum essential value, at an affordable price. This should be done on a month-by-month basis. By tracking this health care-related data, you should be in great shape when reporting season comes around.
Compliance in the face of change
When it comes to the changing health care laws, the best advice is the simplest: Continue to collect, update, and monitor your data as if next reporting season were to go as planned — especially since, as of now, it is!
Health care reform is going to take a long time, no matter how dedicated lawmakers are to get a plan through Congress. The proposed replacement didn’t even mention changes to reporting requirements, meaning they would have stayed the same for employers if it had passed.
Even if reporting requirements change, some form of reporting will still be necessary. Without it, the government can’t be sure that everyone is getting a fair offer under the law, nor can it properly distribute subsidies or tax credits. We may not know exactly what data will be needed, but it’s safe to assume it will be similar to what’s required now.
Make sure to update your company records as often as you can, tracking your hirings, firings, health care offerings, and employee hours by the week or month, rather than trying to sort them out at the end of the year. Additionally, leveraging technology can help you interpret and translate this information into the proper ACA terms and codes for the tricky 1095-C, so you can ensure your safety in the case of an audit.
Using reliable payroll technology and intelligent solutions to track, interpret, and correctly file this information can help you easily adapt to any new reporting environment, or successfully handle the old one, depending on how health care reform unfolds.
The fog surrounding ACA compliance probably won’t clear up anytime soon. But navigating your compliance needs doesn’t have to be difficult. Keep up with what you would do under the current law, manage your data, and leverage technology, and your compliance journey should be a smooth one.