Agencies Must Follow Shared Responsibility Rules Under ACA

Posted on Friday, January 6, 2017 5:52 PM

The IRS has released its updated forms for reporting shared responsibility under the Affordable Care Act (ACA). The forms include a few changes, with the elimination of filing extensions and few coding modifications.

If an employer provides essential health care coverage to 50 or more full-time employees, they must follow the ACA’s “Employer Shared Responsibility” rules by reporting coverage each calendar year using the following forms that were updated in October:
Form 1094-C, Transmittal for Employer-Provided Health Insurance Offer which must be postmarked by Feb. 28, 2017
Form 1095-C, Employer-Provided Health Insurance Offer and Coverage which must be postmarked by Jan. 31, 2017

The IRS likely will make examples out of those companies that fail to file the proper ACA forms on time for 2016, says Marc Catalano, president and CEO of ACA GPS, a provider of ACA management tools and services based in Cumming, GA.

Many agencies still have not filed their 2015 forms, let alone made a dent in 2016, Catalano says. “If they haven’t filed for 2015 and they are an applicable large employer, they need to do it now,” he says.

Agencies that do not offer coverage to 95% of eligible employees could potentially be fined $180 per head per month for the insurance enrollment year, excluding the first 30 employees.

Failure to issue a 1095-C report can result in an additional $260 per employee, capping out at almost $3.2 million per calendar year.

Unlike companies with more stable workforces, home care agencies generally have a variable workforce, Catalano says. Agencies should use one of two methods to determine who qualifies for insurance — the lookback method or the monthly method.

The monthly method allows agencies to determine which employees worked the equivalent of 130 hours or more during a month to determine full-time status and health care eligibility.

The look-back method requires agencies to determine each individual who worked enough hours to qualify as full-time over a standard measurement period. The individuals who qualified are then offered health insurance for the following 12 months.

Catalano noted that the look-back method is preferred for employees with variable hours because their hours vary weekly or monthly. Agencies may break their workforce into different groups —using the monthly method for office workers and other employees with consistent hours, and the look-back method for caregivers and other employees with more variability in their schedules.

Limit the threat of penalties by doing the following:
• Make sure forms are filled out properly and filed timely
• Educate caregivers about health insurance coverage
• Check your plan’s affordability

For the full article, please see the January 9, 2017 Home Health Line Edition.

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