ACA Compliance Changes for 2017 | Netchex Payroll Software
October 31, 2016

Last year the IRS was “generous” when it came to Affordable Care Act compliance. With extended deadlines and reduced penalties, companies were spared the full impact of inaccurate or incomplete reporting and delayed returns. This year however, companies are in for some big changes.

Transition Relief

With 2016 considered a transitional year in regards to ACA compliance, we saw a number of companies benefitting from extensions and deferred policies. In 2017, those transition relief programs will be expiring and companies are expected to be in compliance by current deadlines.

Applicable Large Employers (ALE) are at the center of ACA compliance. By definition, “large” employers are businesses that staff over 50 employees. However, states can elect to augment the definition of “small employer” to companies that have up to 100 staff on payroll – thus making the ALE a company with 101+ employees. Both California and New York have chosen to expand the definition of small employer, though most states continue to categorize ALEs at over 50 employees.

Since transition relief programs will be nonexistent in 2017, ALEs face penalties for non-compliance without exception. There will be no play or pay programs, flexible contribution relief, or grandfathered programs in 2017. Moving forward, all medical plans will be required to be fully ACA compliant.

Earlier Deadlines

The 2017 Affordable Care Act compliance deadlines may have companies scrambling at the last minute. With filing dates up to 3 months earlier than last year, HR departments need to be prepared and act quickly to get the necessary forms completed.

  • In 2016, Forms 1095-B and 1095-C were due to employees (postmarked if mailed, or sent by e-mail) by March 31st. The new deadline is January 31, 2017.
  • In 2016, Forms 1094-B, 1095-B, 1094-C and 1095-C due to IRS (if filing on paper) was May 31st. The new deadline is February 28, 2017.
  • In 2016, Forms 1094-B, 1095-B, 1094-C and 1095-C due to IRS (if filing electronically) was June 30th. The new deadline is March 31, 2017.

Any employer filing 250+ returns during the calendar year must file electronically. Therefore, this information must be received by March 31st or the company risks steep fines.

Increased Penalties

Expect the Employer Mandate penalties to adjust for inflation. According to recent projections, the penalty for qualifying employers who do not provide health coverage will increase up to $100 per employee – from $2,160 to $2,260.

Additionally, in 2017, under the Employee Shared Responsibilities provisions, annual increases in health premiums are likely to result in a reported $150 rise per employee. Companies incurring penalties for coverage in which the share of the premium the employee pays for single coverage exceeds 9.5% of household income, will be $3,390 – up from $3,240 in 2016.

Last year, employers with missing or incorrect data on IRS forms were not assessed penalties. Companies reporting on 2016 data will now be penalized for inaccurate or incomplete returns. Should you encounter an issue with processing and reporting, or a delay in gathering the necessary information, you will need to address and correct the concerns prior to the deadlines.

Netchex ACA Central and Compliance solutions are the keys to generating the data and streamlining returns. With online filing, automated reporting, alerts and reminders, you don’t have to worry about missing the deadlines. We ensure regular analysis of information – whether from payroll or benefits platforms – to simplify the process and minimize the workload. Our experts are up to date with Affordable Care Act legislation and can provide the direction and support you need to file on time each year.