3. Affordable Care Act Reporting Requirements
With the Affordable Care Act (ACA) came both employer and individual insurance coverage mandates, which specify the type of insurance coverage that employers must provide and that individuals must purchase (respectively). The Internal Revenue Service (IRS) announced reporting requirements associated with these two mandates. The required reports will help large employers determine if they are meeting the employer mandate under the Play or Pay provision of the law; they will also provide individuals with documentation of whether they were covered under minimum essential coverage in order to prove that they are meeting the individual mandate.
Ultimately, these reports will help to identify which businesses and individuals may be required to pay penalties and which individuals may be eligible for premium tax credits. In 2015, reporting (for the 2014 calendar year) was optional; however, in 2016, reporting (for the 2015 calendar year) is required. Additionally, “transitional relief,” which had been granted to certain small businesses, will be expiring in 2017, and thus affected employers will be subject to full reporting requirements and penalties if they are not in compliance.
According to the National Association of Health Underwriters (NAHU), “many employers are struggling to comply with the complex and confusing employer reporting requirements of the ACA. Collecting data can be a full time job and cost employers thousands of dollars in additional costs.”
In response, NAHU has worked with members of Congress to introduce two bills to streamline these requirements: S. 1996 by Senators Mark Warner (D-VA) and Rob Portman (R-OH) and H.R. 2712 by Representatives Diane Black (R-TN-6)
REGARDLESS OF THE ISSUE, COMPLIANCE RESPONSIBILITIES ARE COMPLEX AND EVER CHANGING, AND THE COST OF NONCOMPLIANCE IS GOING UP.
and Mike Thompson (D-CA-5). NAHU has stated, “The bills would make significant changes to the March 2014 final regulations that detail the reporting requirements under Section 6055 and 6056 for enforcement of the ACA’s individual and employer mandates. As these regulations are confusing and extremely complicated for businesses of all sizes, H.R. 2712 and S. 1996 will ease the compliance reporting requirements for employers offering health insurance coverage to their employees.”
Due to this action, relief from reporting requirements may come; but in the meantime, employers must comply with the ACA or potentially face fines.
4. New Form I-9 and Fine Increases Employers should expect the release of a new Form I-9 by November 22, 2016. In August, the Office of Management and Budget (OMB) approved the revised Form I-9, but employers may still use the existing form (revision date 3/8/2013) until January 21, 2017. After that date, all previous versions will be considered invalid. The latest version of the Form I-9 will have an expiration date of August 31, 2019.
It has been reported that the proposed changes are intended to help employers reduce technical errors for which they may be fined. The new Form I-9 will still need to be printed and signed, and there will still be no option available to complete the form entirely electronically.
The DOL announced that starting in August 2016, fines for I-9 violations have increased dramatically. For example, the minimum fine for a Form I-9 paperwork
violation is increasing from $110 to $216 as of August 1, with the maximum fine increasing from $1,100 to $2,156 per violation.
Regardless of the issue, compliance
responsibilities are complex and ever changing, and the cost of noncompliance is going up. The Department of Justice has announced in the Federal Register infla- tionary adjustments to civil monetary pen- alties, which could include penalties for the issues listed above as well as many other items. A complete list of adjustments can be found on the Federal Register website4
.
Many dynamics, such as company size and the expertise of employees, will determine the best course of action for the business; however, outsourcing those things not directly related to the production of the product or service is a best practice. Doing so allows your internal resources to focus more fully on your business’s core custom- er services, leaving the administrative tasks for your outsource partner who has specific expertise in handling those matters. r
Kim Moore, CFP®, CLU, ChFC, is a shareholder of Business Financial Group (BFG). BFG was founded in 1998 and partners with employers to provide employee programs through its human resource management, group benefits and retirement plans, and payroll and financial planning services. Securities and Advisory Services offered through Commonwealth Financial Network, member FINRA/SIPC, a Registered Investment Advisor. Business Financial Group is located at 500 North Loop 1604 East, Suite 250, San Antonio, Texas 78232. Kim may be reached at 210- 495-8474.
1.
https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/meetingyourfiduciaryresponsibilities.pdf 2.
https://www.dol.gov/whd/overtime/fs17g_salary.pdf 3.
https://www.dol.gov/whd/overtime/fs17a_overview.htm 4.
https://www.federalregister.gov/documents/2016/06/30/2016-15528/civil-monetary-penalties-inflation-adjustment
40 Issue 3, Fall 2016
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