The US Healthcare system under the presidentship of Barack Obama established the institution to get the people of the nation covered under national health insurance policy either by National Healthcare Exchange or through some reliable healthcare insurance organization. It is called Patient Protection and Affordable Care Act and is also referred to as Obamacare. This is the second most influential healthcare policy affecting United State after Medicare.
According to this act, every national citizen should be covered under health insurance for at least 9 out of 12 months, or they shall be liable to pay the penalty. It requires all the adult citizens to get health insurance with an exception for people who have financial constraints. ACA has made mandatory for all the applicable large employers to get their full-time employees covered under an affordable and reliable health insurance plan.
- Under ACA regulation, no insurance company has the authority to ban people with pre-existing medical conditions from getting covered under their health insurance plan.
- Another ACA regulation called ‘individual mandate ‘ makes it necessary for every individual healthy or medically compromised to get themselves covered under the health insurance plan.
- ACA exempts US citizens who have spent at least 330 days of the 12 month period from maintaining any health insurance requiring minimum health coverage.
How can you stay ACA Compliant and avoid penalties?
- First, determine whether or not you are an applicable large employer. An applicable large employer would be an employer who has 50 or more full-time employee working for them.
- Make sure that all the eligible employees (95 percent of the full-time employee) are covered under the health insurance plan. For the coverage to comply, it must be affordable and should have a minimum value. Keep tracks of the date, the coverage was offered to each full-time employee and know when they have waived off the coverage.
- After making the necessary calculations, fill out the transmittal form, i.e., 1094 C and employee statement, i.e., 1095 C form and report to Internal Revenue Service.
Following are the parameters, which if not complied by the ALE or any taxpayer, shall make him liable to pay the penalty:
- Failure to offer coverage to the full-time employees;
- Failure to provide affordable and minimum value coverage;
- Failure to provide employee statement or incorrect/incomplete filling of the forms.
- Failure to fill 1094/1095 with the IRS.
- Coupled failure of incomplete filling of 1095 forms and reporting to the IRS
- Failure to file with intentional disregard
If you are an individual or an applicable large employer, educate yourself about affordable care act and the requirements since it keeps evolving with the laws and healthcare reforms. Make sure you have got yourself covered under the ACA compliance reporting and adhere to the ACA regulations. To help you with understanding and filling the diverse multiple ACA forms, the section code, compliance regulations and penalties, you can seek assistance of any form reporting firm. These firms have the agile technology to provide the adept solution to any and every tax form related query be it how to fill the 1099 form or the 6039 reporting.