Friday, January 19, 2018

What is the Impact of the Affordable Care Act on Part-Time Employees

The Patient Protection and Affordable Care Act (PPACA) has affected employers who employ part-time employees in several ways. The most significant impact is ACA’s definition of full-time employment. What is the impact of the Affordable Care Act on part-time employees?

What is the Impact of the Affordable Care Act on Part-Time Employees

The PPACA considers employees working 30 hours or more full-time, however, traditionally employers defined part-time as those working less than 40 hours. This new definition has forced employers to revise their schedules or expand health care coverage

Affordable Care Act’s Impact on Part-Time Employees

“Under the monthly measurement method, the employer determines if an employee is a full-time employee on a month-by-month basis by looking at whether the employee has at least 130 hours of service for each month.”

- Affordable Care Act

Employers must take into account the number of part-time employers when determining whether they meet the threshold of 50 full-time or full-time equivalents (FTEs). Employers on the border will want to monitor the hours of part-time employees carefully to ensure employees do not affect employers responsibilities. 

Result of PPACA’s Requirements

While the PPACA requires employers to offer health insurance to full-time employees, there are no regulations for part-time individuals. The result is an increase in employers hiring more part-time employees working 29 hours or less per week.

Right now, there are no penalties under ACA for not offering health care coverage despite coverage provided to full-time employees. Employers should weigh the pros and cons of hiring staff more heavily made up of full-time or part-time employees.

Benefits of Full-Time Vs. Part-Time Employees

Take care of your employees, and they will take care of you.

Full-time employees are more likely to develop loyalty, a sense of ownership to a business, and remain with the company longer. This is an important factor to remember when considering the hiring and training costs of bringing on new staff members. They are also more likely to give the employer more control over their time and efforts. 

There are several benefits to hiring a part-time employee. They can be a great asset to small businesses due to their flexibility and relatively low cost.

Patient Protection and Affordable Care Act Filing

If your business is required to file ACA this tax season allow ACAwise and it’s dedicated team members to navigate you through these difficult times. ACAwise is solely focused on your ACA reporting and compliance by providing an innovative cloud-based system and experienced call staff in place to ensure full ACA compliance.

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Thursday, January 18, 2018

Deadlines and Penalties For IRS 1099 Form

As a Human Resources professional, you are well aware of the slew of government reports your business must file. Starting this tax season you will need to file some forms sooner. The IRS deadline for filing Form 1099-MISC is January 31st. Which means you can’t wait to get this done. There is no time to lose deadline and penalties for IRS Form 1099s. 

Form 1099-MISC 2018 Deadline: January 31st
1099 Form Variations Deadline: February 28th (Paper)/ April 2nd (Electronic)

Deadlines and Penalties For IRS 1099 Forms

What Penalties Could My Company Face?

A penalty will be enforced if the filer fails to file the required 1099 series forms by the deadline, fails to include all required information, if the return contains incorrect information, or if the filer files on paper when required to e-file.

Penalty amounts are based on the date that the correct form is filed on or the correct payee statement is provided. The penalty for failing to file an accurate return is separate from failing to submit the correct payee statement.

Failure to File IRS 1099 Series Forms

Failure to file 1099 series forms by the deadline results in a $50 penalty per form if submitted within 30 days following the due date. The maximum penalty is $532,000 per year or $186,000 for small businesses.

Filing more than 30 days after the deadline but before August 1st raises the penalty to $100 per form, with a maximum fine of $1,596,500 per year or $532,000 for small businesses.

Filing 1099 Forms after August 1st or failing to file corrections will increase the penalty to $260 per form, with a maximum fine of $3,193,000 per year or $1,064,000 for small businesses.

How to Avoid Form 1099 Penalties and Interest

Now that you understand the penalties and what they entail, I am sure you will avoid having to pay them. 1099 series of information returns reporting income from self-employment, interest and dividend, or independent contractors to the IRS are due by January 31st.

To avoid penalties use our sister product, TaxBandits to e-file and pay any owed taxes on time with our quick, easy and secure step-by-step filing process. We provide filers built-in error checks, bulk upload data and experienced US-based customer support.

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Wednesday, January 17, 2018

Seven Important ACA Question You Need To Ask Yourself

Are you ready to file your Affordable Care Act (ACA) forms? If any Applicable Large Employers or Third Party Administrators fail to meet their obligations for offering health coverage to all full-time employees under Section 4980H, they will be liable for Employer Shared Responsibility penalties. Here are seven important ACA questions you need to ask yourself in preparation for filing.

Seven Important ACA Question You Need To Ask Yourself

1. Has your company accurately archived, documented, and tracked all the required data for eligibility?
  • Full-Time/Part-Time benefits eligibility (30 hours/week -- 130 hours/month).
  • Individuals that accepted and declined coverage.
  • 95% or more of full-time employees offered affordable coverage.

2. Do you have waivers or declination forms for those who declined the sponsored plan?

3. Do premium contributions for the least expensive plan satisfy the 9.66% affordability threshold?

  • Are you using the correct Affordability Safe Harbor Method?
  • Could you use a different Safe Harbor method to provide greater control over your company's health care costs?
  • What is the least expensive plan for each employee?

4. Have you reviewed the health plan contracts for eligibility limitations?
  • Will your company continue to insurance those who have moved from full-time to part-time status?

5. Are you prepared to file correct 1095/1094 Form information by the statutory deadline for each year?
  • ACAWise is a full-service ACA Form solution for Forms 1094/1095.

6. Are you prepared to file the Employee Coverage Tool (ECT) Forms and reply to any Exchange Inquiries?
  • Which team member is designated to access this information in order to complete and response to Exchange questions? 

7. Do you have proper documentation prepared for any future IRS inquiries?

Eliminate Penalties with Proper Planning

There is danger ahead…. ACA penalties are looming in the not so distant future. Severe fines and penalties can cause serious damage to any ALE or TPA. Are you ready for filing season?
ACAwise has dedicated team members ready to help you navigate through these turbulent times. ACAwise is solely focused on your ACA reporting and compliance by providing an innovative cloud-based system and experienced call staff in place to ensure full ACA compliance. Gain peace of mind this ACA filing season!

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Monday, January 15, 2018

What is the Individual Shared Responsibility Provision?

As you know, the Affordable Care Act (ACA) prohibits health insurers from denying individuals coverage based on pre-existing conditions or family histories. However, this was a major concern for lawmakers and insurers because they feared taxpayers would wait until they got sick to purchase health insurance. However, to stay in business, they must collect more money than they pay out. This is where the individual shared responsibility provision comes in.

What is the Individual Shared Responsibility Provision?

Individual Shared Responsibility

Employers, insurance companies, and individuals are all responsible for keeping health insurance coverage affordable and available. The individual shared responsibility provision is a guideline for the individual's responsibility and role in ACA. It states that individuals must carry health insurance, receive an exemption, or pay a hefty penalty. This penalty is a federal tax referred to as the shared responsibility payment.

Shared Responsibility Payment

If you employees are not covered by minimum essential coverage, they will need to pay the shared responsibility payment. The amount they owe will depend on several factors:

  • Number of uninsured individuals in the household during the previous calendar year.
  • Are the insured children?
  • How long have you and your dependents been uninsured?
  • Total income of your household

Avoid The Shared Responsibility Penalty

Your employees can avoid the shared responsibility penalty by carrying minimum essential coverage. This includes the health care plans provided by your business, health insurance provided by government programs, and health-care exchanges.

2018 Tax Season

As most of you are aware, the individual mandate has been repeal for the upcoming year, but your employees will still need to report coverage for 2017. Help to inform your employees about changes in regulations and what is expected of them this tax season. Remind them that if they did not carry insurance during the previous year they will face substantial penalties.

ACAWise Your Reporting and Compliance Solution

Don't be lulled into a false sense of security. Despite the ongoing efforts to “repeal and replace” the controversial Affordable Care Act, it is still required by law and those who ignore their responsibilities will face severe consequences.

Choose ACAwise to handle your company’s ACA reporting and compliance. Getting started is easy, and, with volume-based pricing, you will get the best deal available! Explore all ACAwise has to offer with a free demo. Get to know one of our knowledgeable product managers and learn how we can help you smoothly file your 1094 and 1095 Forms.

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Friday, January 12, 2018

New 2018 Withholding Tables Released by IRS

Thursday the IRS released Notice 1036 updating the income-tax withholding tables. This is the result of the Tax Cuts and Jobs Act enacted in December. The 2018 withholding tables are just the first in a series of future updates they will improve the accuracy of 2018 withholdings. Here is what your business needs to know about the new 2018 withholding tables released by the IRS.

The IRS Releases New 2018 Withholding Table

Implementation of 2018 Withholding Table

Before implementing the 2018 withholding tables business should continue to use the 2017 guidelines. However, you should switch to the new 2018 withholding tables as soon as possible, but no later than February 15th. 

Future Form W-4 Revisions

Notice 1036 will help to minimize the burden on taxpayers and employers. At this time employees are not required to do anything. But IRS is planning to revise Form W-4 later on this year because this form is ultimately used to determine how much your employee's paychecks are withheld toward income taxes. 

2017 Vs. 2018 Withholding Table

The Tax Cuts and Jobs Act passed last month made several changes to the established tax plan including the repeal of personal exemptions, an increase in standard deductions, and updates in tax rates and brackets.

2018 Withholding Table Details 

  • Employee portion of Social Security: 6.2% with a taxable wage of $128,400
  • Employee portion of Medicare: 1.45% with no wage base limit
  • Medicare Surtax: .9% which exceeds $200,000 or $250,000 for married taxpayers 

Guaranteed Tax Compliance

Comment below with any question for our experienced tax specialists. If your business still needs to file their ACA reporting and compliance forms, use ACAWise as your full-service solution. Provide the information you have on your employees’ insurance coverage and our variable-rate software will take care of the rest. Based on your information we will make sure the right codes are in place before e-filing your ACA Forms

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Wednesday, January 10, 2018

Your Crash Course Guide to IRS 6055 and 6056

While the individual mandate will be going away soon, we are all still required to file those forms this year. To clarify, despite the various changes to the Affordable Care Act (ACA), tax reports due during the 2018 tax season are based on requirements and coverage offers in 2017. Here is your crash course guide to IRS 6055 and 6056.

IRS Code Sections 6055 and 6056 in regards to the individual mandate requires employers to provide minimum essential coverage. Applicable Large Employers (ALEs) and Third Party Administrators (TPAs) must report specific information to the IRS such as coverage provided and the provider. Failure to comply with these reporting rules could cost your business. Here is your crash course guide to IRS 6055 and 6056.

Your Crash Course Guide to IRS 6055 and 6056

What You Need to Know About 6055

Section 6055 is used to determine whether individuals are covered by minimum essential coverage. This section calls for the health plan issuer or insurance company to provide Form 1095-B and Form 1094-B to show the individual's coverage levels. This will also prove the if an individual is fully insured through their employer or if they receive coverage through a spouse or parent.

ACA Forms Associated With Section 6055:
Form 1095-B:IRS information return that must be sent to the covered individual and filed with the IRS.
Form 1094-B:
IRS transmittal Form to be filed with the IRS along with Form 1095-B

What You Need to Know About 6056

Section 6056 applies to Applicable Large Employers (ALEs), which are businesses that employ 50 or more full-time or full-time equivalent employees. According to the ACA all ALEs are required to offer health coverage that meet quality and affordability standards.

Forms associated with section 6056 are used by the IRS to verify whether the employer met requirements and if they need to penalties for employees not offered adequate coverage.

ACA Forms Associated With Section 6056:
Form 1095-C
IRS information return that must be sent to the covered individual and filed with the IRS.
For 1094-C
IRS transmittal Form to be filed with the IRS along with Form 1095-B.

Self-insured employers that are also ALEs can use both sections of Form 1095-C and 1094-C to meet section 6055 and 6056 reporting requirements. 

Where 6055 and 6056 Reporting Gets Complicated

The above forms call for information not routinely captured by Human Resource databases such as dependent information details. Section 6056 requires employee details regarding coverage offered and accepted on a monthly basis, affordability test results, costs sharing structure, and reasons why certain employees were not offered coverage. To add to this complexity 6056 reporting requires specific IRS coverage codes.

What Happens If Your Business Doesn’t Comply

Failure to comply can cost you significant penalties! Here is what ACA penalties your business could face:
  • Failing to file a correct information return with the IRS will result in a penalty of $260 per form, not to exceed $3,193,000 in a calendar year.
  • Failing to provide a correct information return (1095 Form) to the individual for whom the form is reporting information can incur a $260 penalty per form, again not to exceed $3,193,000 per the calendar year.
  • You can also incur a $260 per form penalty if you are required to e-file but submit paper forms instead.

Warning: If you intentionally fail file these forms, the IRS can pull out the big guns and increase your per-statement and total penalties for your missing returns.

We Are Here to Help

If all of these requirements and forms seem overwhelming, use ACAWise as your full-service solution. Simply provide the information you have on your employees’ insurance coverage and our software will take care of the rest. Based on your information we will make sure the right codes are in the place before filing your ACA Forms.

Ensure Your Compliance Today!

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Monday, January 8, 2018

The Top 5 ACA Compliance Issues You Will See This Year

The future of the ACA is uncertain with the current white house administration
Despite the uncertain future of the Affordable Care Act Applicable Large Employers and Third Party Administrators should continue to finalize their 2018 ACA Forms. As you start to strategize your 2018 benefits programs, it is essential to keep up with new and ongoing compliance obligations necessary to keep your organization ACA compliant. Here are the top 10 ACA compliance issue you will see this year.

Top 5 ACA Compliance Issues You Will See This Year

1. Employer Shared Responsibility

Although the current administration is planning to eliminate or at least alter the Affordable Care Act most reconciliation rules will not allow for the repeal of the employer shared responsibility. The minimum value requirement for 2018 remains unchanged; however, affordability has decreased. An employer can only charge a full-time employee 9.56% of their household income for health insurance compared to 9.69% in 2017.

As you prepare your ACA forms for filing be sure, you will need all employee documents offering coverage and most importantly the consent waivers for that coverage. 

2. Cadillac Tax

All applicable employers should review their risk of the Cadillac tax even though the tax is not scheduled to begin until 2020. Read more about what the Cadillac tax is by clicking here. However, the uncertain American Health Care Act in its current form will delay the implementation of the tax until 2026.

The best way to review your risk of increased tax obligations is by identifying plans and benefit factors. Review your companies flexible spending account, health savings accounts, and health reimbursement arrangements to gain a better understanding of your future obligations. As an ALE or TPA, you should focus on pre-65 retiree plans and other high-cost plans. 

3. Preventative Services

As of January 2018, preventive services are now included as a requirement. These requirements include adult depression screenings, low dose aspirin for at-risk adults, syphilis screenings, and more.

4. Mental Health

Doctor and patient discuss the changes they can expect with ACA health insurance the next yearThis issue remains uncertain since the mental health parity was passed a year before the ACA and has been mostly overshadowed. However, with recent tragedies, this reform issue will not be going anywhere anytime soon. The new compliance deadline for 2018 is unclear but is a significant concern for all business owners. Your business should undergo a limited review and decide if your business requires a more in-depth dive to ensure overall mental and behavioral health.

5. Third Parties

Health plans continue to grow increasingly complicated more businesses are now turning to third parties to comply with ACA rules and regulations. However, employers must continue to monitor their plans. Consider including a protective provision such as anti-assignment and forum selection to limit how long the company is exposed to lawsuits, where you can be sued, and by whom you can be sued.

2018 ACA Filing Season

Unfortunately, we cannot predict the future of the ACA, but we can help your business remain complaint during the upcoming season. ACAwise is an all-in-one ACA reporting software designed to track and monitor your ACA compliance throughout the year. When it is time to e-file we will create Forms 1095 and 1094 on your behalf! Then you just review your forms and securely e-file directly with the IRS. We will even mail your recipients copies from our South Carolina based office the next business day.

Ensure Your Compliance Today!

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