What is the Affordable Care Act (ACA)?
The Internal Revenue Service added new reporting requirements under the Internal Revenue Code under sections 6055 and 6056 related to health insurance coverage provided by insurers and employers.
The Afford Care Act (ACA) created these new reporting requirements. Most employers may be completely unaware that these new reporting requirements are mandated with some very hefty fines if not followed. Worse yet, attempting to gather the information that needs to be reported to the IRS after-the-fact is likely to be more difficult and expensive.
How does the ACA affect employers?
In order to avoid penalties under the ACA’s “Play or Pay,” ALEs (applicable large employers) must offer affordable and minimum value health coverage to full-time employees and their dependents, and must be reported to the IRS. As quoted here “This provision is also referred to as “pay or play,” because ALEs potentially pay a penalty if they do not offer coverage that meets ACA requirements and one or more full-time employees obtain subsidized coverage through a health care Marketplace (also referred to as an Exchange).”
The IRS will use information submitted to determine whether employees are subject to the new shared responsibility penalty. This information will also allow the IRS to determine whether or not an employer is liable for the shared responsibility penalty.
More answers regarding the ACA can be found on the IRS’s ACA FAQ section.
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