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Although the future of ACA is uncertain, employers have reporting responsibilities in 2017

Posted by Joe Cole on January 26, 2017

Welcome to 2017… The Affordable Care act is still law but possibly not for long.  As the Repulicans in Congress try to figure out whether to replace the law immediately or over the next several years, as an employer you will still have reporting responsibilities. 

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Topics: Health Care Reform

How to Classify Temporary Employees under ACA

Posted by Christie Engler on April 12, 2016

Businesses need to be clear on how temporary employees can affect ACA status. How will the use of of temporary employees affect your benefit responsibilities?  There are defined rules under the employer mandate.  In a nutshell, using a Temp is appropriate when a company expects there will be no permanent need for the employee.

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Topics: Health Care Reform

The IRS, thanks to ACA, will Increase in Revenue

Posted by Dwight Seeley on March 30, 2016

The IRS with the help of the Affordable Care Act and other legislation is gearing up for an Increase in Revenue.  More evidence that the Affordable Care Act (ACA) is more about revenue generation than healthcare is becoming evident as different tax based legislation and ACA legislation team up in 2015 and 2016. 

In 2015, IRS Sections 6721 and 6722 were amended by the Trade Preferences Extension Act of 2015…just in time for the first year of reporting on ACA related Forms 1094 and 1095 due in 2016 for taxable years beginning in 2015. And on the heels of that, IRS announcement 16-11 increased penalties in 2016 effective for 2015 reporting due in 2016.

Below is a summary of the effects of these amendments as they relate to 2016 tax filings for 2015.

  • In 2015, failure to file returns and statements required to be filed after December 31, 2015 increased from $100 to $250/record and maximum penalties increased from $1.5 million to $3 million.
  • In 2016 the increase is to $260.00/record and the maximum is $3,178,500
  • In 2015, if corrections weren’t filed within 30 days a fine of $30/record increased to $50/record and the maximum penalty was increased from $250,000 to $500,000.
  • In 2016, the fine stays at $50/record and the maximum penalty is increased to $529,500.
  • In 2015, if corrections were filed before August 1st but after 30 days a fine of $60/record increased to $100/record and the maximum penalty was increased from $500,000 to $1.5 million.
  • In 2016, the fine stays at $100/record and the maximum penalty is increased to $1,589,000.

In addition to these staggering increases, it’s important to note that these penalties apply to ALL tax information...from ACA 1094 forms to 1099 forms. The IRS claims that the latest increases are the result of inflation adjustments which regularly occur, however most of the penalties mentioned above had not changed in at least 5 years. I can understand inflation adjustments applying to goods and services…not so much with fines and penalties.

Finally, it seems the IRS does have a bit of a conscience. The IRS addressed corrections and reduced penalties for the ACA reporting due in 2016 in FAQs under the heading of Affordable Care Act Tax Provisions…Questions and Answers on Information Reporting by Health Coverage Providers (Section 6055). In essence the August 1, 2016 deadlines have been extended and the following statement is included in the FAQ.

“In implementing new information reporting requirements, short-term relief from reporting penalties frequently is provided. This relief generally allows additional time to develop appropriate procedures for collection of data and compliance with the new reporting requirements. Accordingly, the IRS will not impose penalties under sections 6721 and 6722 for 2015 returns and statements filed and furnished in 2016 on reporting entities that can show that they have made good faith efforts to comply with the information reporting requirements.”


About the Author, Dwight Seeley, Vice President of Employee Benefits Programs at Sequent

Dwight is a member of the leadership team at Sequent and is  responsible for managing the employee benefit programs for Sequent and for our client companies. Prior to that he was a Practice Leader for the Consulting Solutions area of Sequent where he applied Sequent proprietary tools and methods to help organizations improve alignment and increase accountability for better outcomes.
 

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Topics: Health Care Reform

How Medicaid Expansion helps Ohio Businesses

Posted by William Hutter on February 17, 2016

Over two and half years ago, the expansion of the Medicaid program in Ohio was approved by the State Controlling Board because there wasn’t enough support to get it passed in the legislature.  Fast forward to today and you'll find solid economic reasons why Ohio's Medicaid program may be good for Ohio businesses. 

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Topics: Health Care Reform

Ohio Law changes, giving Employers expanded Health Coverage Options

Posted by William Hutter on February 5, 2016

What was a much politicized decision made by Gov. Kasich to: 1) NOT form a state health care and exchange, and 2) expand Medicaid for all Ohioans….has turned out to be a masterful stroke of political maneuvering. Why? By not establishing a state health insurance exchange, it allowed for market-driven alternatives to emerge in Ohio.

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Topics: Health Care Reform


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