As the calendar year draws to a close, you’re likely taking many steps to make sure your organization is ready for 2016. From preparing budgets to writing annual reports, the end of the year is a busy, and often hectic, time for accountants.
For many nonprofit accountants, year-end preparations now include getting ready for Affordable Care Act (ACA) planning. Because the deadlines fall from January to March, there’s no time to waste.
But who is required to report, when and why? We’ll provide the answers to those questions and more in this blog post.
What is ACA Planning and Reporting?
The Affordable Care Act became a law in March 2010. You might also hear of it referred as the Patient Protection and Affordable Care Act (PPACA). Its purpose is to lower the overall cost of healthcare for individuals and provide better, more affordable coverage to more people.
Here’s why ACA planning and reporting matters to employers—under the Employer Mandate of the ACA, employers must provide full-time employees with the opportunity to enroll in and receive affordable health insurance.
This mandate extends to the dependents of full-time employees as well. Nonprofit organizations fall under this mandate as does any applicable large employer (more on that in a moment).
What happens if you fail to offer such coverage, or the coverage is found to be unaffordable? You risk being penalized and receiving non-deductible excise taxes.
What’s Required of My Organization?
Let’s go back to applicable large employers for a moment (ALEs).
You are deemed an ALE if you had 50 or more full-time employees on staff the previous calendar year.
A full-time employee is anyone who works 30 or more hours a week each month or works 130 hours per month on average (known as full-time equivalent employees). Keep in mind that these hours include sick leave, vacations, federal holidays, jury duty, etc.
It is the responsibility of ALEs to give the appropriate forms to full-time and full-time equivalent employees as well as file them with the IRS.
As for forms, it’s important to verify reporting requirements for your organization before beginning. However, the following forms are needed:
-Form 1095-C: Given to employees by employers as a means of certifying and specifying coverage
-Form 1094-C: Submitted to IRS by employers along with Form 1095-C
You can find these forms as well as more information about reporting requirements for ALEs on the IRS website.
Employees must receive the appropriate forms by January 31. Deadlines for IRS receipt of paper forms is February 28. Electronic copies may be submitted by March 31.
The submission is of electronic copies is required by ALEs with 250 or more returns. Even if your organization is smaller than this, you’ll find that working with electronic copies allows for faster, more streamlined process. The key is aligning the forms with a flexible and efficient accounting software.
Abila MIP Fund Accounting was designed with organizations like yours in mind. The three separate modules, Payroll, HR Management and Employee Web Services, work together to provide a full-range solution to meeting reporting requirements.
You’ll find the forms you need for an easy ACA planning and reporting process as well as the means to determine eligibility for full-time employee status.
At SYGNVS, we proudly work with organizations like yours to provide comprehensive IT solutions. For more efficient year-end planning and year-round success, reach out to our team for a free demo of Abila MIP Fund Accounting.