ACA Compliance for Applicable Large Employers to Avoid Penalties

ACA Compliance for Applicable Large Employers to Avoid Penalties




The Affordable Care Act (ACA) reporting and audits that demonstrate compliance on paper starts this year, 2016. Although the forms and filing may be a complicated process, those who don’t comply will face penalties from the IRS. Having a software system to keep track of the needed information for filing and printing out reports would be a blessing.

However, for many businesses year round preparation and organization will make the process easier. Understanding the new requirements and providing the information for compliance may see complicated and overwhelming, but knowing what information is needed can simplify the process.


Large Employer under ACA

Definition of an Applicable Large Employer under the ACA Regulations

Under the Internal Revenue Code (IRC) Section 4980H, applicable large employers must offer health coverage to full time employees and will be penalized if no coverage is offered, the offered coverage is unaffordable or it does not provide minimum coverage. The Employer Shared Responsibility Provision also require an assessment if only even one full time employee receive a premium tax credit for purchasing coverage in the new individual Marketplace.

To determine if your business has greater than 50 employees, all employees that worked at least 30 hours a week or 130 hours monthly are counted as well as the total number of hours worked by part time employees divided by 120 to get the count of “full time equivalent” (FTEs) employees to get the total number of full time employees. Although employers of 50 to 100 employees are not subject to penalties for the 2015 year, they are required to report this information.

Qualifying businesses must provide minimum essential coverage to at least 95% of full time employees. Employers must also track and document that all eligible full time employers were offered health coverage and if the employee waived the coverage.


ACA Information Reporting

Information Reporting

Employers must report the cost of employer sponsored health plans on employee’s W-2 forms to show the total cost of individual healthcare of the group health plan. The total cost of coverage should be reported. This includes both employer and employee contributions. The affordable Coverage Standard is that employee’s contributions must not exceed 9.5 percent of wages.

The Minimum Value Standard requires that the total allowed costs of benefits must be above 60% of the costs. The plan must also include substantial coverage for in patient hospitalization and physician services. Employees will receive a new tax forms this year, the 1095 and employers should provide employees with information about their benefits and coverage through a summary plan description or a summary of benefits and coverage.

Summary of Provisions

The following is a brief summary of ACA requirement:

– The Employer Shared Responsibility provisions require employers with 50 or more full time employees to offer coverage to 95% of their employees and their dependents. The coverage should be affordable and provide minimum coverage.

– 2016 is the first year of Information Reporting on Health Coverage. The deadlines have been extended and now require employers must furnish information to individual by March 31, 2016 and file with the IRS by May 31 on paper and June 30 electronically.

– Other than employer payment plans, an employer can reimburse employees for premiums paid through a qualified health plain in or outside the Market place. However such arrangements does not meet the Affordable Care Act and an employer may be assessed an excise tax of $100 a day and up to $36,500 a year for each employee.

– A employer must furnish employees with a Summary of Benefits and Coverage form that explains their plan’s cost and what it covers to help them understand and consider their health insurance option. Employers can be assessed a penalty for non-compliance.

– The ACA also dictate that insurance companies spend at least 80% of premium cost on medical care rather than administration costs or provide rebates to policy holders which is usually the employer who provides a group health plan.


ACA Provisions

– Employers who issue more than 250 W-2 forms must include the total cost of employee health coverage on W-2s.

– Under the Flexible Spending Account Contributions, there is a limit of $2500 on elective employee contributions, not employer contributions and it does take cost of living adjustments into consideration.

– Employers are obligated to withhold an additional 0.9% for Medicare Part A Hospital Insurance on employees earning over $200,000 for single and $250,000 for married joint filers but employer contributions remain the same.

– Since 2013, net investment income including taxable capital gains, interest, dividends, rents and royalties over $200,000 for single and $250,000 for married joint filers is assessed a 3.8% tax.

– Employees eligible for health coverage will only have to wait for 90 days for coverage.

– ACA also increased incentives for employers who participate in workplace wellness programs and reward employees from 20 to 30%. The maximum reward for programs that are designed to prevent or reduce tobacco use is 50%.

Although the summary provides the major areas businesses should be aware of for compliance, it may still require further scrutiny to make sure all bases are covered. The bill is 2,400 pages and complicate but the Small Business Administration website offer links for those who want more information on the subject.


Article provided by Neches FCU, with locations in Port Neches, Nederland and Beaumont.
Neches FCU is a trusted Texas Credit Union and has a courteous and attentive team of professionals ready to provide services to our members.
When its doors open at any of the several service centers, the mission of “Ultimate Member Satisfaction” becomes the imperative for every employee.
They are respected for a personal, dynamic and upbeat work atmosphere, providing a memorable service experience, and where members are known by name.

6 Often Ignored Secrets of Successful Leaders

6 Often Ignored Secrets of Successful Leaders

It is said that leaders can make or break a company. They are responsible for keeping all the members of an organization on their feet at all times. They do this while still instilling a sense of safety. It is a tough line to walk but great leaders like Howard Schultz (Starbucks’ CEO) and Warren Bennis manage to do it quite well. People, especially budding leaders, think that leadership is something that a person is born with. While this might not be completely untrue, the life of a leader is also about learning and growth.

The following points discuss six secrets of great leaders that everyone can benefit from.

Kindness Is a Virtue

Successful Leaders Understand That Kindness Is a Virtue –

People tend to confuse kindness with weakness. This is because they think that if they are kind to their members, it would be confused with lack of character. However, kindness, when displayed honestly, can be the strongest statement a leader makes.

A kind word offered with genuine admiration and care can be better that most motivational strategies. For instance, Schultz’s $250 million investment in the higher education of Starbucks employees is an act of genuine kindness. It was aimed at making the life of his people better and much more fruitful.


Adopt Strength

Successful Leaders Forgo Harshness and Adopt Strength –

Being harsh, rude and dominating is not the same as inherent strength. The former would push team members away and would scare people into following a leader. But, it wouldn’t last for long.

However, true strength of character would earn the respect and trust of people, convincing them of a leader’s greatness. This kind of strength also inspires confidence when the times aren’t good. Leaders who are just harsh would only find support during good times and will be left alone later. Leaders who understand the difference between strength and harshness are always successful.



Successful Leaders Value Confidence over Arrogance –

Every person has something, some talent or some feature that makes them unique. When they hone that skill, they can be experts at it. A leader, more than anyone else, has a lot of such qualities but a lot depends on how the leader measures those qualities.

A leader who thinks less of the qualities would be under-confident. A leader who overestimates the extent of those qualities moves in the category of arrogance. A leader who understands the true worth of those qualities meets with success. Such a leader also expects the same from team members.



Successful Leaders Are Realistically Optimistic –

It is extremely difficult to balance positivity and optimism with a realistic attitude. A pessimistic leader would stop being effective the moment times are bad. An overly optimistic leader would simply sit back and hope luck to turn back the tide. However, a realistic leader who is optimistic would read the situation and adjust future plans.

This is the kind of dynamism that leaders need to display. It can not only help to deal with troubles but will also help with morale. In order to move forward, a good balance of realistic and optimistic attitudes is needed.


Walk Your Talk

Successful Leaders Walk Their Talk –

A great part of a leader’s life involves talking. There comes a point, however, when the talk needs to be converted into action. For instance, if a leader says that service is important, they need to show it.

There was a rumor that Howard Schultz would be running for President. However, he squashed those rumors, saying that he was yet to give his all to Starbucks. This proved to his employees that he was a leader who valued service over all else. He was not interested in limelight. He just wanted to work and earn his people’s trust.


Be a Protector

Successful Leaders Act as a Buffer Between Their People And The World –

There is no company in the world that has not faced turbulent times. Organizations that have come out with minimum damage from such times did so because of great leaders. There are critics everywhere. On top of that, the world is ever changing and dynamic.

The leader’s primary job is to act as a buffer between the people and the rest of the world. The leader needs to absorb all the shocks so that people can work without any worry on their mind. At the same time, when tough talks are needed, the leader should be able to deliver that.

If the above features are included in a budding leader’s arsenal, they could become unstoppable. These tips have been put together by studying great leaders and understanding their behavior. However, they are not the last word. This is because every leader learns different things from experience. Thus, these tips should be inculcated after taking personal experiences into account. Understanding what works and what doesn’t should be the most important factor in the life of a leader.

Hopefully, this article was informative.
As a side note, when filing your business taxes this season, consider the amount of time and effort involved in filing, printing, and mailing out 1099’s and W-2 forms to workers and contractors. Those hours could be better spent finding more clients, instead of shuffling paper forms.

A better solution is to file 1099 electronically with a provider who handles the grunt work for you. More specifically, a service that manages the printing and delivery of the forms to individual recipients. If you need to manage your 1099 filing, check out Not only do they get your e-filing safely and securely, but they print and deliver your tax forms. Check out their explainer video for more details.