October 31, 2023

2023 ACA Compliance Checklist for Employers

2023 ACA Compliance Checklist for Employers

As an employer, it is crucial to understand and fulfill your obligations regarding the Affordable Care Act (ACA). ACA compliance ensures that you provide affordable and comprehensive healthcare coverage to your employees. However, keeping up with the ever-changing requirements can be challenging. In this blog, we will provide you with a comprehensive ACA compliance checklist for 2023 to help you navigate through the complexities of the law.

What is required for ACA compliance?

ACA compliance involves several key components that employers must adhere to:

Employer Shared Responsibility Provision

Also known as the ACA’s “play or pay” requirement, this provision applies to applicable large employers (ALEs) with 50 or more full-time equivalent employees. ALEs are obligated to offer minimum essential coverage to a specific percentage of their full-time employees and their dependents or face penalties.

What is ACA Reporting?

Employers are required to furnish information returns (Forms 1094-C and 1095-C) to both their full-time employees and the IRS. These forms include details about the employer’s healthcare coverage offer and enrollment information.

Health Insurance Marketplace Notices

Employers are also responsible for providing Marketplace Notices to their employees. These notices inform employees about their potential eligibility for premium tax credits if they choose Marketplace coverage instead of employer-sponsored plans.

What are the ACA Requirements for employers in 2023?

To ensure compliance with the ACA in 2023, consider the following key requirements:

Evaluate ALE Status

Determine if your organization qualifies as an ALE by calculating your average employee count during the preceding calendar year. If you have an average of 50 or more full-time equivalent employees, including full-time and part-time workers, you fall under this category. Your payroll provider should be able to do this for you using payroll compliance services or ACA filing and reporting services.

Offer Affordable Coverage

For 2023, ALEs must offer affordable health insurance that meets minimum essential coverage requirements to at least 95% of their full-time employees (and their dependents) to avoid penalties. Affordable coverage is determined by the employee’s contribution not exceeding a certain percentage of their household income.

Reporting Deadlines

Maintain accurate records on healthcare coverage offers and enrollments for each reporting year. Note that ACA reporting deadlines are subject to change, so stay updated on any modifications by consulting resources such as the IRS website or seeking assistance from HR professionals that offer ACA Filing and Reporting – Tesseon

Educate Employees

Inform your employees about the healthcare coverage offered, including its benefits and costs, and provide them with a Summary of Benefits and Coverage (SBC). This will enable them to make informed decisions about their healthcare options.

Monitor Employee Classification

Carefully categorize your employees as full-time, part-time, or seasonal based on the ACA’s definitions. Remember that different rules apply to each group regarding health insurance eligibility and affordability.

What is ACA compliance for employers?

ACA compliance for employers refers to meeting the legal obligations outlined in the Affordable Care Act. Compliance involves offering affordable healthcare coverage to eligible employees, providing accurate reporting to the IRS, and ensuring that employees receive the necessary information regarding their healthcare options.

ACA Compliance Checklist:

Offer of Coverage:

  1. Offer affordable health insurance that meets minimum essential coverage standards to eligible employees.
  2. Determine which employees are eligible for coverage based on their hours worked or employee status.

Form 1095-C – Employee Statements:

  1. Provide Form 1095-C to all full-time equivalent employees, including those who declined coverage.
  2. Report each employee’s offer of coverage, if any, on Form 1095-C using the appropriate codes.

Form 1094-C – Employer Transmittal:

  1. Submit Form 1094-C to the IRS along with copies of all Form 1095-C statements.
  2. This form serves as a summary of all employee statements and provides important information about your organization’s healthcare coverage.

Filing Deadlines:

  1. Furnish Form 1095-C to employees by January 31.
  2. File Form 1094-C, along with copies of Form 1095-C, with the IRS by February 28 (if filing by mail) or March 31 (if filing electronically).

Employer Shared Responsibility Payment:

  1. Determine if your organization is an Applicable Large Employer (ALE) based on average employee count.
  2. If you are an ALE, track employee hours meticulously to identify full-time equivalent employees and offer them affordable coverage.

Measurement Periods:

  1. Establish measurement periods to determine employee eligibility for coverage.
  2. Use a standard measurement period of at least three months to track employee hours.

Reporting Software:

  1. Invest in reliable and accurate payroll and HR software that includes ACA compliance features.
  2. Choose software that automates data collection, prepares correct forms, and keeps you informed about ACA requirements and updates.

Ongoing Monitoring:

  1. Regularly review your processes and ensure accuracy in tracking employee hours and coverage.
  2. Stay updated with any changes in the ACA regulations and update your procedures accordingly.

Compliance Audits:

  1. Conduct internal audits periodically to ensure compliance with ACA requirements.
  2. Review your records to confirm that all employees have been offered appropriate coverage.

Open Enrollment Periods:

  1. Communicate open enrollment periods to employees and provide them with enrollment options.
  2. Ensure that employees understand their eligibility criteria, deadlines, and available coverage options.

Documentation Retention:

  1. Retain all necessary documentation, including employee records, offers of coverage, and Form 1095-C statements.
  2. Ensure that all required documents are securely stored for the required period.

Penalties and IRS Notices:

  1. Familiarize yourself with potential penalties for non-compliance and understand the corrective actions required.
  2. Respond promptly to any IRS notices or requests for information regarding ACA compliance.
  3. Staying compliant with ACA regulations can be complex, but by following this checklist, you can keep your organization on the right track. Remember to invest in reliable payroll and HR software that can help automate ACA compliance tasks and streamline your overall process. Speak with a trusted payroll software provider to explore available options and select the best solution for your business. As an employer, it is essential to stay up to date with ACA compliance requirements to avoid penalties and provide quality healthcare coverage to your employees.

At Tesseon, we understand that ACA compliance can be complex and time-consuming. That’s why we offer comprehensive solutions to handle all aspects of ACA compliance for your business. Our team of experts stays up-to-date with the latest regulations, ensuring that your company remains compliant with the ACA’s requirements. From determining eligibility and tracking employee hours to managing benefit enrollment and generating necessary reports, we take care of it all. By partnering with us, you can have peace of mind knowing that your ACA compliance is in capable hands, allowing you to focus on other important aspects of your business. If you would like to learn more about our ACA Filing and Reporting services call 1-800-345-0087 or fill out the form below.


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Disclaimer: The information provided on this blog page is for general informational purposes only and should not be considered as legal advice. It is advisable to seek professional legal counsel before taking any action based on the content of this page. We do not guarantee the accuracy or completeness of the information provided, and we will not be liable for any losses or damages arising from its use. Any reliance on the information provided is solely at your own risk. Consult a qualified attorney for personalized legal advice.

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