While news reports talk of changing or eliminating the Affordable Care Act (ACA), it still exists and compliance is required. The Internal Revenue Service (IRS) identified 49,259 employers that are potentially liable for almost $4.5 billion in penalties for 2015 alone. The IRS has started to send out penalty letters for 2016, and penalty letters for 2017 will begin going out in spring 2019.
This means that ACA compliance is essential, and getting it wrong can be extremely expensive.
Yet, ADP's recent ACA survey reveals there is significant confusion about what the ACA requires, how to comply with ACA eligibility and affordability provisions, and what IRS reporting information to send (and when). For example, 90 percent of respondents did not know how long employers have to respond to an IRS penalty letter (Letter 226J).
Other key insights from the survey are as follows:
ADP asked survey respondents to describe their challenges with ACA compliance in their own words; most of the comments expressed frustration with data, keeping up with changes and the time required to ensure compliance:
Compliance challenges also shift with size. Employers with 50-150 employees say the data review, completing year-end forms (IRS Forms 1094-C and 1095-C) and finding affordable coverage are their top challenges.
Employers with 151-999 employees say the time needed to monitor, analyze and report is their biggest issue. Larger employers, from 1,000-5,000 employees, find the ongoing determination of eligibility most difficult. Organizations with more than 5,000 employees say the lack of a clear, streamlined process for compliance is the largest challenge.
Each of these challenges can make ACA compliance both difficult and expensive. So, if you are confused about what you should be doing, you are not alone. If you have received a penalty notice (IRS Letter 226J), promptly get expert help and respond.
Whether or not you're certain you have it all down, take our ACA compliance quiz and see how your knowledge compares to that of our survey respondents. After taking the quiz, you'll have the opportunity to see your results and get a copy of the ADP report: ACA Compliance: Confidence, Confusion, and Change.