CoastalBenefits: ACA Compliance Package


Coastal Payroll is your greatest resource concerning the Affordable Care Act. To respond to the ACA, we have grounded ourselves in three key initiatives:

  1. Understand: We have gained a thorough understanding of not only the law’s prevailing objectives, but also the specific complexities (nuts and bolts) that affect our clients.
  2. Adapt: Once the legislation was passed, we embarked on a journey to develop a complete compliance package that will keep you in check with the law. Below, we present to you the specific actions and tools to maintain that compliance and avoid any penalties.
  3. Connect: As always, we keep you informed on all notable updates and events via multiple outlets, including Coastal Payroll’s Blog, Coastal Payroll’s Facebook Page, & Coastal Payroll’s ACA Webcast Series.

Below, you’ll see Coastal Payroll’s tools to maintain your ACA Compliance:

1. Forms 1094/1095

Effective tax year 2015, applicable large employers (employers with over 50 full-time equivalent employees based on previous calendar year) must file annual returns with the IRS and provide employees a copy of these statements (1095 employee statements).  This reporting places a heavy burden on employers as it requires monthly tracking of benefits offered to full-time employees.  Our ACA compliance package includes 1094/1095 filings and helps you avoid potential costly penalties.

2. Affordable Care Act Report (Available Now!)

  1. We have a new system generated report, which provides data by month over a measurement period
  2. The goals of our reports are as follows:
  1. Provide full-time employee totals (number of employees who work over 130 hours per month on average); these employees must be offered health insurance if you have 100 or more (50 beginning 2016) FTE during your measurement period
  2. Provide Full-Time Equivalent (FTE) totals (sum of part-timer hours divided by 120); this is used in determining if employer has 50 or more FTE
  3. Provide affordability calculation; this is based on safe harbor calculations to arrive at 9.5% of income (employee’s share of health insurance expense cannot exceed this amount)

3. Penalty Calculations (Effective 2015)

  1. Employers who meet the criteria of having 50 or more FTE will face penalties if they do not comply…
  1. Penalty for not providing insurance to employees ($2000 per year per employee, with first 30 employees exempted from penalty)
  2. Penalty for not providing affordable or minimum essential coverage ($3000 per year per employee that qualifies for subsidy credit on health insurance exchange)

4. Notice of Exchanges and Subsidies (Effective October 1, 2013)

  1. Provide all clientes with approved notices:
  1. Notice for clients who provide health insurance
  2. Notice for clients who do not provide health insurance

5. Assist With W-2 Reporting of Employer Health Costs (Effective 2012 for employers with over 250 W-2’s)

  1. Mandatory for employers with over 250 W-2’s
  2. Optional for employers with under 250 W-2’s
  3. We provide the appropriate reporting codes in payroll which flow to the required W-2 reporting box
  4. We will assist with entry of these amounts, or in training clients on input of these amounts in the payroll system

6. Medicare Tax Increase of 0.9% on Wages Exceeding $200,000 (Effective 2013)

  1. The payroll system performs automatic calculation of the increased tax for eligible employees

7. Process Medical Loss Rebates (Effective August 1, 2012)

  1. Rebates could be issued by the insurance company in the form of reduced insurance premiums annually in August, given as cash to your company, or as cash to your employees.
  2. If your company provides pre-tax contributions to your employees for health insurance and your company receives a rebate in cash (i.e., not in the form of reduced 2012 premiums), you will in most cases, need to distribute this rebate to active employees participating in the health insurance plan. To do this, you can lower their deductions in payroll to provide the reiumbursement. Or, you can issue checks to the employees. If you lower the deductions in payroll (specifically, the pre-tax deductions), this will provide the appropriate tax treatment for the rebate. If you provide the employees with the rebate in cash, this will need to be recorded in payroll in order to pay the taxes on the refund (the employee received a tax benefit when they paid for their portion of insurance and that tax benefit needs to be recaptured).

8.  Benefit Plan Administration Offerings

  1. Benefits enrollment through iSolved, our newest, state-of-the-art payroll platform
  2. Carrier connection
  3. COBRA services
  4. FSA services
  5. Invoice auditing and reporting
  6. Employee acknowledgement:
  1. Summary of Benefits
  2. Employee Notice of Exchanges

We recommend employers take the following steps to begin their compliance efforts:

1. Request an Affordable Care Act Report from Coastal Payroll

2. Determine Business Size

3. For businesses with 50 or more FTE resource for assistance listed in parenthesis:

  1. Calculate potential penalties for non-compliance (coastal payroll)
  2. Calculate potential costs of providing health insurance (benefits broker)
  3. Determine timeline for implementation of health insurance offerings if benefits will be offered (benefits broker)
  4. Obtain Notice of Exchanges and Subsidies (coastal payroll)
  5. Determine delivery method for Notice of Exchanges and Subsidies (employer; payroll platform provides portal to post documents for employees)
  6. Determine delivery method for Summary of Benefits and Coverage (employer; payroll platform provides portal to post documents for employees)
  7. If benefits will be offered, determine best method for enrollment and submission of forms to benefits broker and insurance carrier:
  1. Coastal Payroll provides Benefit Enrollment and Carrier Connection tools in our iSolved platform
  2. Coastal Payroll can also act as conduit to provide necessary reports to your benefits brokers (new hires, terminations, dependent changes, etc.)

4. For Businesses with Less than 50 FTEresource for assistance listed in parenthesis:

  1. Obtain Notice of Exchanges and Subsidies (coastal payroll)
  2. Determine delivery method for Notice of Exchanges and Subsidies (employer; payroll platform provides portal to post documents for employees)
  3. If health insurance offered to employees
  1. Determine if your business qualitifes for tax credits (coastal payroll; we will provide guidance, but ultimately your CPA will perform the final calculations with filing of income tax return)
  2. Understand requirements for offering insurance to all eligible employees (benefits broker)
  3. Determine delivery method for Summary of Benefits and Coverage (employer; payroll platform provides portal to post documents for employees)

5. For Businesses with Over 250 W-2 Employees

  1. All steps listed in step 3 above for businesses with 50 or more FTE
  2. Determine method to enter employer health care costs for reporting on W-2 (both employee and employer costs

Request Further Information for Coastal Payroll’s ACA Compliance Package