ACA Compliance Update


If you’re not already well on the way to putting together an Affordable Care Act compliance effort with all hands on deck, the time to start is now. Effective January 1, 2016, every employer with 50 or more full-time equivalents – using a specific calculation methodology defined by the Department of Labor, must provide a fully-qualified health plan to all qualified employees, or face some steep penalties.

Specifically, the fine for noncompliance with the Affordable Care Act is as high as $100 per day per employee. The minimum applicable fine is $2,500 if you don’t manage to make the correction without an audit.

If your business is cited for noncompliance with the Affordable Care Act, and you don’t make the required corrections within a specific period of time, your potential fine increases to as much as $15,000.

Compliance Costs

In order to avoid these crippling penalties, expect to make some investments in terms of money, time and effort. According to information from the Small Business Administration, the average cost to small firms of complying with the terms of the Affordable Care Act is $15,000 per year.

Much of this is related to the additional effort required to track the work hours logged by each worker, the number of absences, and the amount the company spends on providing health benefits.

The employer mandate has been delayed a number of times, and could possibly be delayed again, as incumbents don’t want to be dealing with the negative economic effects of the mandate during an election year. However, the current law has the employer mandate becoming effective as of the beginning of 2016, so employers should focus on that date.

What To Do Now

Most employers will need to have some full-time expertise involved to help get the firm into compliance with the employer mandate and other aspects of the Affordable Care Act. For those firms with full-time human resources staff, this is likely going to require most or all of the attention of a full-time equivalent going forward, when you take compliance issues, plan selection and communication into account. For those smaller firms that don’t have the ability to put a full-time human resources professional on the task, they will probably be best served by seeking outside help from a third-party vendor.

In either case, it’s important to launch a formal compliance effort, complete with taskings, responsible managers, and deadlines immediately.

Involve your IT Staff

Your ACA compliance effort will likely need data and documentation from a number of directions, including from payroll, I-9/immigration documentation, work time/payroll, payroll vendors, line managers and workers themselves. Your HR managers will be your key go-to individuals, but ensure they are talking with IT and to the line managers actually responsible for communicating with the work force as well. Communication is going to be critical.

Protect PII

Yes, you will have to gather detailed information on your workers and hours, and you will be responsible for documenting that workers’ enrollment in your workplace plan or securing other individual coverage from an outside source. But you still have to ensure Personally Identifiable Health Information is protected for all employees, customers and vendors.

Maximize Participation

If you have over 50 full-time equivalents on your payroll, and some workers choose to get individual coverage rather than sign on with your workplace plan, your company could get charged a penalty for each worker who receives a subsidy via a federal or state health insurance exchange, under the ‘anti-freeloader’ provisions of the plan.


To save time and effort, and to reduce your potential liability, try to have as much of the health insurance sign up process as possible automated. That is, choose a plan that lets employees sign up and choose their own options using a Web application, rather than involving your own staff.



BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such.  Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.



Posted 6/15/2015