I would not celebrate yet…but H.R. 4616 would basically shut down the ACA’s Employer Mandate, sometimes known as the “Pay or Play” for larger employers. Members of the House of Representatives will be voting very soon on this bill that could suspend collection of the ACA Employer Mandate penalties and also further delay the ACA Cadillac Tax. Nothing is set in stone yet, but the Republicans potentially have enough votes to make it happen. This would be a giant win for ALEs, or Applicable Large Employers, who are the targets of the ACA’s Employer Mandate tax
ACA Employer Mandate penalties are huge and complicated
As it stands today….employers with at least 50 full time employees are required to provide compliant Health Insurance to their people. The employer is also required to pay for a lot of the employee’s premium, based on their monthly gross wages. Tracking employees hours, wages, etc, has become a nightmare for employers. Some software companies are running to the bank though, with this new customer base. Some of the penalties for employers that screw up are in the tens of thousands, or more.
IRS 226J is a big scary letter that some larger employers are getting
If an employer gets an IRS 226J letter, its pretty scary, and details out what the employer owes and why. I’ve had more than a couple of our employer groups call in a panic. It turns out that they had made a slight error in their “reporting” for the year…..the 1094 and 1095 notifications. When I saw the letters they got, I would be a little nervous too. One of them had an IRS penalty assessment of almost $50,000. To say that she was upset is a gross understatement. After calming her down, we found that she did not “check a box” on the notification that went to the IRS the January before. Problem solved.
Because we ONLY do Group Benefits, we discovered the error pretty quickly. Many companies have brokers that are “jack of all trades” and not specialists. That can be a problem when there’s an issue to deal with. If not us….find yourself a Benefits Broker that ONLY does benefits. Its totally to your advantage!
Steve Brauer-Principal, Brauer Insurance Services, www.brauerinsurance.com (877) 421-4325