Payroll and the Affordable Care Act

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What You Need To Know To Stay on Track and Avoid Penalties

This is a pivotal year for the Affordable Care Act (ACA). Specifically, this is the first year that employers subject to the ACA must track detailed information about health care coverage—including offers of coverage and the full-time status of employees. However, as we approach 2016, the ACA's reporting requirements will require even more rigorous attention from HR, benefits, and payroll directors.

For each month starting in January 2015, Applicable Large Employers (ALEs) must attest on Form 1094-C that they have offered affordable coverage to at least 70% of full-time employees (i.e., those with an average of 30 or more hours of service per week or 130 or more hours of service per month). That threshold increases to 95% in 2016. An employer that fails to meet this threshold may be liable for a nondeductible assessment of $2,080 for each full-time employee in excess of 30 (80 in 2015)—making the actions required for ACA compliance even more critical. Keep in mind that the assessment is determined separately for each month, but is reported and payable on an annual basis. Said another way, if you think you might owe a penalty for the early months of 2015, it's not too late to take corrective action now to avoid penalties for the later months of 2015.

Read the full article published in the October 2015 issue of PayTech to learn more.

View the slideshare here!