Healthcare Strategist-Broker Shares Insights in CPA Continuing Education:
Strategies To Protect Your Business in World of Affordable Care ‘Play or Pay’ – 2017-2018
Area of Certainty: Treasury’s Enforcement of Costly EMPLOYER PENALTIES
The unique American healthcare system is in turmoil. Even in this context of daily legislative bouts, a business owner must remain pragmatic and follow the law of the land: The Affordable Care Act. Simply keeping track is daunting: insurers which come and go, emerging I.T. companies offering new benefits platforms, Medicaid Migration options, Professional Employer Organizations, and more permutations all the time. Rising to the forefront now, most of all, is the question of how to remain compliant with the laws and regulations of the ACA. We will focus now on the need to comply with the “Employer Shared Responsibility” provisions or face the penalties of I.R.C. secs. 4980(H)(a) and (b).
Enforcement of the so called ‘Play or Pay’ rules via Treasury’s ACA Compliance Validation System (ACV) is set to roll out this month and ‘mass-identify’ employers which may not be complying with the Employer mandates. In short, your firm may indeed be an “Applicable Large Employer” and thus be liable to pay between $2,000-$3,000 per employee should Minimum Essential Coverage and Affordable Coverage not be offered. Do you have 50 “Full Time Equivalent” employees? The regulations just to count including measurement, standardization and stabilization periods require expertise.
These stiff non-deductible penalties can stifle an enterprise. Once cited for penalties, you the employer (or, perhaps it’s your client) has the burden of proof in demonstrating compliance. These penalties (plus mounting interest) can put an “Applicable Large Employer” (A.L.E.) under a lot of pressure.
Recommendations for Immediate Action for CFO and HR Director:
– Familiarize with the already in force rules
– Include an ACA expert broker on your team with HR Director, CFO
– Establish compliance and systems to maintain compliance
– See Treasury Department’s Announcement of ACV Program progress at
In sum, simple advice: Act. Act now. Contact your trusted benefits advisor. Make sure it’s a specialist who can become part of your innermost team. Give him or her a chance – you totally need them now.