ACA Requirements for Large Employer’s Plan

February 9, 2021

The Affordable Care Act (ACA) requirements will be enforceable for Applicable Large Employers (ALEs) in the upcoming filing season.  For the reportable tax year 2015, employers with 50-99 full-time employees are candidates for Transitional Relief if, and only if, they meet specific criteria.  The other portion of ALEs (companies with 100+) do not get this break.  As you may know already, the penalty for not reporting and complying with the mandates set forth are steep and costly. Although the IRS has announced they will not assess penalties the first filing year (2015), you are still required to make a good faith effort to mail and e-file, or they will.  The following year the IRS will assess and collect penalties from employers that fail to comply. Accordingly it’s best for employers to lock in a good reporting and compliance solution now. So, exactly how will these employers comply? A recent survey conducted by Equifax and PwC helps shed some light on their plan-of-action.  These survey results serve as a good assessment since they were distributed to over 480 companies in 36 different industries in the US. Out of the population surveyed only 10% said they had an in-house or outsourced solution confirmed.  Only 10%! With a deadline fast approaching and penalties becoming a reality many would find this quite alarming.  This piece of legislation has one of the more complicated IRS reporting components we have ever seen.  The final published ACA regulations are 10,535 pages consisting of approximately 11,588,500 words. Talk about wordy. Becoming compliant can require companies to take on a complex, monthly data collection and reporting project often involving several departments and IT resources. However, ACA guidelines permits companies to offload this process to specialized third party providers. See below for ACA solution/readiness trends: Outsourced vs. In-house solutions…

  • 26% of small employers do not know if they will use and in-house or outsourced solution
  • 37% of large employers are currently planning for an outsourced vendor solution
  • 27% of mid-sized employers are planning for an outsourced vendor solution

Type of Outsourced Vendor…

  • 48% of ALEs are planning on using their payroll vendor
  • 35% of ALEs are planning on using a specialized ACA compliance vendor
  • 18% of ALEs are still in the processes of locating outside vendors

How they will deliver the forms…

  • 46% of ALEs are undecided on how they will distribute 1095-C’s
  • 30% of ALEs plan to use an outside vendor
  • 24% of ALEs plan to take on the job in-house

The majority of companies who fit the reporting mandate are either unsure of how they will or are actively planning to outsource the distribution, collection management and electronic filing for the 1095/1094-C series. Tab Service Company has built out their current tax processing system, TSC1099, to support Section 6056 reporting.  As a full outsourced solution provider we can help lower internal costs and ease the burden of learning the ins-and-outs of ACA reporting and compliance.