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ACA Compliance Protects Your Company and Your Customer Data
Have legal peace of mind on ACA compliance with all your data in one place. On-demand ACA annual forms, easy filing, automatic tracking, and so much more in a single at-a-glance ACA compliance dashboard.
The Affordable Care Act places certain data reporting requirements on employers, with critical reporting deadlines. The applicable employer supplied 1094-C and 1095-C forms must be provided to employees by January 31st of every year and filed with the IRS. The IRS uses these forms to determine employer shared responsibility and affordable minimum essential coverage, so having data accurate and readily available is critical.
By now, you are aware if you are required to provide these forms to your employees, as these forms have been required since 2015. If you are uncertain, or have grown since then, here are some IRS guidelines to determine if you are now required to report these forms. If you have ANY question as to whether these apply to you, please consult your CPA or Accounting professional.
3 Things you Need to Know about your Company for ACA Reporting:
Are you Self-Insured?
Self-funded health plans are ones in which the employer assumes the financial risk of providing health care benefits to its employees. This is different from fully insured plans where the employer contracts an insurance company to cover the employees and dependents. In self-funded health care, the employer assumes the direct risk for payment of the claims for benefits. The terms of eligibility and covered benefits are set forth in a plan document which includes provisions similar to those found in a typical group health insurance policy. Unless exempted, such plans create rights and obligations under the Employee Retirement Income Security Act of 1974 (“ERISA”).
Are you an ALE (Applicable Large Employer)?
An applicable large employer is an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year. A full-time employee generally includes any employee who was employed on average at least 30 hours of service per week and any full-time equivalents (for example, 40 full-time employees employed 30 or more hours per week on average plus 20 employees employed 16 hours per week on average are equivalent to 50 full-time employees).
Are you a member of a Controlled Group?
There are three types of controlled groups that are considered one singular employer for the purposes of the ACA employer mandate. The IRS defines, and provides example of, these three controlled groups in IRS Code § 414 (b) and 414 (c).
1. Parent-Subsidiary Groups
Generally, a parent-subsidiary group exists when there is a “parent” business which owns 80% or more of a “subsidiary” business. There can be one subsidiary or multiple subsidiaries. There can also be multiple tiers of entities connected to a common parent. The parent company only needs to control one of the companies, since a lower level company could control other companies. See IRC § 1563(a)(1) and Treas. Reg. § 1.414(c)-2(b).
2. Brother-Sister Groups
A brother-sister group under common control exists if:
· The same 5 or fewer persons who are individuals, estates, or trusts own (directly and with the application of the attribution rules) a controlling interest (80%) in each organization, and
· Taking into account the ownership of each person only to the extent ownership is identical with respect to each organization; the persons are in effective control of (more than 50%) of each organization.
· The 5 or fewer persons whose ownership is considered for purposes of the controlling interest requirement for each organization must be the same persons whose ownership is considered for purposes of the effective control requirement.
· Ownership of stock and other interests are determined in the same way for this purpose as they are for purposes of determining whether a parent-subsidiary group exists.
See IRC § 1563(a)(2) and Treas. Reg. § 1.414(c)-2(c)(1)
3. Combined Groups
A combined group is a group of three or more organizations, if:
· Each organization is a member of either a parent-subsidiary or brother-sister group, and
· At least one organization is the common parent of a parent-subsidiary group and is also a member of a brother-sister group.
See IRC § 1563(a)(3) and Treas. Reg. § 1.414(c)-2(d)
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