The IRS recently confirmed that employers offering affordable coverage to at least 98% of qualifying employees may use simplified reporting rules under the Affordable Care Act but must verify the coverage percentage on a monthly basis.
The law states that employers with over 50 full-time equivalent (FTE) employees must provide health insurance coverage to their employees or face a penalty. (The IRS has granted extensions to this requirement upping the limit to 100 employees for 2015 provided certain requirements are met.) Thus, employers need to have methods in place to verify the number of FTE’s and coverage. A quality ATA system, such as the system provided by Time & Pay will generate the necessary reports, to meet ACA FTE reporting requirements. Employers with at least 50 FTE’s are to use IRS forms to report whether coverage offered to employees meets the minimum value and affordability standards.
The number of employees must be calculated on a monthly basis and cannot be averaged over the course of a year, the IRS indicated. Although an annual verification that coverage was offered to 98% of employees is required, verification must be provided on a monthly basis because coverage is offered on a monthly basis by the insurance provider as employees leave, become qualified for coverage or may be able to add or drop coverage.
Employers that have part-time employees who are near the weekly threshold of 30 hours and thus must be counted as full-time employees may want to include them in the total count to take advantage of the simplified reporting method.
Tax code section 6056 defines the employer shared responsibility provisions of the ACA. Note however it does not require that employers specifically identify which employees are full-time.
In a more recent development, an IRS advisory committee recently encouraged general ACA transition relief by suggesting another years delay in employer reporting requirements in order for all parties, both government and private sector, to better understand those reporting requirements. The IRS still has not released final drafts of some reporting forms. The Advi$or will keep you posted if such a delay is implemented.
About Time & Pay:
Time & Pay is a professional payroll service provider located in Johnson City, TN. We service businesses of all sizes and types throughout the United States. Founded in 1992, Time & Pay provides businesses with complete payroll services , guaranteed payroll tax compliance, automated time and attendance systems and services, pay-as-you-go worker’s comp, human resource management systems and services, and more. We provide our customers with the cost effective tools you need to better manage your payroll, your employees and your business. Time & Pay’s services guarantee you will save money, time and aggravation and we back them up with the customer service you expect and deserve. Contact Us today to learn why business owners throughout the country are saying:
“Time & Pay! Why would you do payroll and timekeeping any other way?”
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