With 2016 quickly approaching, employers should be preparing for reporting requirements under the Affordable Care Act (ACA). From documenting the offer of health care coverage to all eligible full-time employees (FTEs)—those who work 30 or more hours a week—to reporting hours worked for all employees, businesses have a lot on their plate. And with the introduction of Forms 1094-C/1095-C by the IRS, it may get even more challenging.
Moreover, 2016 means that, under the ACA’s “Employer Shared Responsibility” mandate, all Applicable Large Employers (ALEs)—those that employ 50 or more FTEs—will need to prove they have offered “affordable” health insurance coverage to eligible employees or risk facing significant fines. While large companies may have the resources to take on this task, many small and mid-sized business owners need help navigating the complex health care landscape.
In fact, according to ADP research, more than four in 10 small business owners surveyed believe that benefits administration has become more complex. A few (one in seven) are more likely to outsource benefits administration to help protect their organization from costly penalties.
One way to help alleviate this burden is to partner with a Professional Employer Organization, or PEO. Specifically, PEOs provide businesses with a co-employment model where they retain the day-to-day managerial control of employees, but the PEO’s compliance and risk experts help by managing tasks associated with HR and employee benefits—allowing employers to focus more on growing their business.
So, what can this mean for ACA compliance efforts? A PEO can accurately track and report data for each employee to help business owners stay in compliance. Additional ACA-related responsibilities with which a PEO can help include:
For small and mid-sized businesses, the health care landscape continues to evolve. PEOs can help businesses avoid common ACA pitfalls while giving them more time to focus on building their business and remaining competitive. And for those employers not considered an ALE? Partnering with a PEO can still be beneficial, providing support for Summary of Benefits and Coverage (SBC) distribution and Form W-2 reporting.
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Maria Black is President of ADP TotalSource®, the largest Professional Employer Organization (PEO) in the United States. TotalSource provides HR outsourcing, payroll, benefits administration and overall human capital management (HCM) solutions to small and mid-sized U.S. businesses. Maria is responsible for all aspects of the business unit, including marketing, strategy, service, operations, product, finance and HR.