Important Employer ACA Considerations for 2017

The Affordable Care Act (ACA) regulations continue to impact both small and large companies as they plan for 2017 and look for ways to grow their businesses. Keeping up with ACA changes requires dedication and management. Constant resources need to be directed to staying educated and on track for meeting with new or shifting compliance guidelines.

Here are a few ACA issues that employers need to keep ahead of as the year progresses:

Small Employer Group Market Changes

The Protecting Affordable Coverage for Employers (PACE) Act was passed last fall, putting the definition of a small employer as having one to 50 employees. However, states are permitted to elect to extend the definition of a small employer up to 100 employees.

How businesses are categorized will now be at a state-by-state level. Most states are using the PACE Act definition although a few states, including the large states of California and New York have chosen to use the expanded definition to 100.

Health Plan Transition Relief to Expire

Transition relief for the Employer Shared Responsibility payment for large employers with an average of 50 or more full-time equivalent employees during the prior year will expire January 1, 2017.

Depending on an employer’s eligibility and benefit plan start date, applicable large employers (ALE) must be compliant at some point this year or face penalties. Starting January 1, 2017, the non-calendar year transition relief expires and all ALEs are required to offer compliant coverage starting at the beginning of the new year.

Also expiring January 1, 2017, is flex contribution relief and grandfathered plans. Organizations will need to review their contribution strategy if they include any of the various flex contribution benefits and make adjustments, as they will be considered a lost opportunity cost after this year.

Fifteen states in 2016 require the end to any grandfathered non-ACA compliant plans and the other 35 states will be in 2017. All medical plans will then be required to be fully ACA compliant.

IRS Reporting Penalties

This year when employers completed Forms 1094-C and 1095-C they were not assessed any penalties for incorrect or missing data. However, that good faith effort has not been extended for 2016 reporting. Employers need to identify any issues with their reporting and plan ahead whether they are gathering information themselves or using a third-party vendor. They need to set aside time for testing to correct any coding or processing errors.

Employers should also consider putting their employees’ Form 1095-Cs online and having them opt-in to access their information vs. incurring the cost of printing and mailing these forms.

Employers still have quite a few guidelines and regulations to stay abreast of and implement in order to remain ACA compliant and avoid future penalties.

Source: Employee Benefit Plan Review. What Businesses Need to Know to Navigate the ACA Now. June 2016. PP10-12.