Many Affordable Care Act (ACA) penalty liabilities are written in black and white, but the more deadly of those liabilities are somewhat muddled. Here are seven deadly ACA penalties you should avoid.
ACA Penalty Liability #1: In 2015 Department of Labor audits increased 300% in some areas. Imagine how much ACA audits will increase once they start generating serious revenue for the government. You need to take the ACA audit threat seriously.
ACA Penalty Liability #2: Your overconfidence makes you more vulnerable to ACA penalties: According to a 2015 survey, 79% of small to mid-sized businesses were confident that they were ACA compliant. In the same survey, 36% admitted that they had been hit with unintended compliance penalties. In 2nd-3rd quarter 2016, businesses will start to receive their ACA penalty notices. Businesses with more than 50 full-time employees will be hit with a fine of up to $2,000 per employee if they don’t offer coverage.
Some businesses believe that the cost of ACA penalties is cheaper than providing health benefits, but they’re about get a rude awakening. In some cases, some of these ACA non-compliance penalties start at $36,500 per employee. Many formerly confident companies are going to get serious ACA penalty sticker shock.
ACA Penalty Liability #3: Separate payroll and benefit companies put you at greater risk. At one time it might have made financial sense to have separate payroll and benefits companies. Now, however, if these two vendors (who have totally different reporting systems) don’t share information with you flawlessly, your company is held liable for any inaccuracies or omissions. By utilizing Payday HCM Bundle plans user can save up to 40% due to the configuration that marries all aspects needed for compliance.
ACA Penalty Liability #4: Not keeping your eyes on the revised ACA deadlines. If you’re trying to manage the ACA paperchase on your own, you may be in such a hurry to meet their reporting deadlines that you make mistakes. You’re human. Form 1094-C and 1095-C reporting to employees is due March 31, 2016. The reports to the IRS are due May 31, 2016 or, if filing electronically, June 30, 2016.
ACA Penalty Liability #5: The ACA health plan “Cadillac tax” doesn’t make allowances for regional variables. The excise (or Cadillac) tax, which was originally slated to take effect in 2018 but has been delayed until 2020, is based on national numbers. Your state may have higher costs that push your health plan over the Cadillac tax thresholds. Many companies may need to change their current health plans in 2016-2017 to prepare for the tax. You should talk to a combined payroll and benefits specialist like Payday HCM to make sure your regional costs and your company’s health plan will keep you out of the danger zone.
ACA Penalty Liability #6: You’re not aware of health plan fixes that could make your plan more tax friendly, less costly, and more efficient. There are money-saving options beyond changing your current health plan to include adding a high deductible option, increasing the employee contribution percentage, or increasing co-insurance features. Talk to a Payday HCM ACA expert who can analyze your business’ health plan, staffing, and reporting needs to create a custom fit for your specific circumstances.
ACA Penalty Liability #7: Your health plan is first and foremost about attracting and retaining talent. Employer-provided health insurance started during World War II as an amenity to attract workers during a time when wages were fixed. Today, companies are still competing to attract the best talent. As prospective employees weigh your health plan against your competitors’ plans, you don’t want to be found wanting. To win the talent war, you need a powerful ally and a human capital management firm like Payday HCM to design an attractive and affordable benefits and payroll package that will beat the competition.
Contact your Payday HCM professional (888-2PAYDAY) to see how we can turn your ACA penalty liabilities into a competitive asset.