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While we have been hearing and talking about the employer mandate for many months now, the impending tax season makes it all the more crucial to really understand the law (IRS sections 6055 and 6056) and how to stay in compliance. In part one of this two-part series, we looked at reporting information, forms, and who needs to comply with reporting requirements. In part two, we will look further into methods of reporting, deadlines, and penalty relief. 

This year marks the first year applicable large employers (ALE; 50+ full time or full-time equivalent employees) are required to report employer-sponsored healthcare coverage to the IRS and provide statements to full-time employees under IRS Sections 6055 and 6056.  To help circumvent common misperceptions and errors, this two-part blog series will look at: 1) what needs to be reported, what forms need to be used, and who needs to comply with reporting requirements; and 2) methods of reporting, deadlines, and penalty relief.

Stanford Social Innovation Review’s 10^th Annual Nonprofit Management Institute is taking place September 9^th-11^th in Stanford, CA, with a welcome reception at the Sheraton Palo Alto on the 8th. The conference focuses on executive education for social sectors, and this year’s theme is “Building Resiliency: Yourself, Your Organization, Your Society.”

The 2016 tax season may seem far away, but with numerous changes in the works for organizations that offer group health coverage, its actually the ideal time to start planning for ACA reporting.  Previous blog posts have shared information around reporting requirements and the release of draft forms and penalty fees from the IRS.

Increasing healthcare costs, ACA compliance, balancing ever-precarious budgets, retaining valuable staff…midsize nonprofit organizations must consider many factors related to offering and managing group health coverage these days. More than ever, they need a better solution to the dilemma of providing mandated and high-quality employee healthcare while also watching the bottom line. 

While traditional fully-funded healthcare can be expensive and self-funded coverage comes with a significant financial risk, partially self-insuring melds the two into a more affordable health insurance option with less monetary risk.

With the Supreme Court’s June ruling signifying that the ACA is here to stay, many are now looking ahead to the 2018 Cadillac tax as more of a reality – and its heating up discussions among economists, large corporations, unions, and politicians. In fact, later this month a lobbying group called The Alliance to Fight the Forty is launching to attempt to repeal the tax. And legislation to repeal the tax was introduced by both Republicans and Democrats in the Spring.

On July 6, 2015, the Department of Labor (DOL) issued a proposal to more than double the minimum salary level that white-collar workers must be paid to be exempt from overtime, from $23,660 to $50,400 annually (or from $455/week to $970/week).  With a debate centering around if the proposed salary levels are set correctly (and how future increases will be considered), a public forum for written comments is open until September 4th, 2015.  The proposed amounts are at the 40th percentile of weekly earnings for US employees, and apply only to non-exempt employees (e.g. any employee not considered “executive, administrative or professional”). If approved, the Obama administration says that these changes would impact nearly 5 million US workers within the first year.

In 2016 employers who provide minimum essential coverage to employees will be required to begin mandatory reporting of employee health coverage. In addition applicable large employers (ALEs) will be required to report compliance with the employer shared responsibility provisions (e.g. “pay or play”). To help organizations prepare for new reporting mandates, the IRS is disseminating information around reporting guidelines and penalties.