The Most Effective Way to Stay ACA Compliant


While it continues to be heavily debated in political circles, the federal Affordable Care Act isn’t going anywhere in the near future. And you can’t afford to let your guard down when it comes to ACA compliance.

  • Under the ACA’s employer mandate, companies with qualifying plans must offer quality health insurance to at least 95 percent of their full-time employees and fulfill all related reporting requirements. Otherwise, you risk paying a hefty penalty.
  • Your plan must offer minimum essential coverage and minimum value. Minimum value means paying at least 60 percent of benefit costs. And, that coverage must be affordable. To meet affordability guidelines, your required contribution for the lowest cost self-only insurance option cannot exceed 9.86 percent of an employee’s current-year household income. This applies even if a worker selects a different coverage option.

How to Maintain Year Round Compliance

To ensure that you maintain ACA compliance throughout the year, allow all eligible employees to enroll in your employer-sponsored plan in a timely fashion. It’s also important to stay vigilant so you can ward off receiving any penalty assessment 226J letters. If you do, your first question will probably be, “We comply with the ACA, so why did they send this to us?” In most cases, a proposed penalty falls into one of these three categories:

  • You failed to mark the 1094-C as “authoritative” when you sent forms to the IRS.
  • You failed to indicate that minimum essential coverage was offered in Part III Column A on your form 1094-C.
  • You had one or more employee who obtained a premium tax credit from an insurance exchange while working for your company, yet you offered them compliant coverage, which they waived.

Responses to 226J letters are due to the IRS within 30 days.

Say That Again?!?!

There’s no doubt that ACA compliance can be confusing, stressful, time-consuming  and, potentially, extremely costly to your business. The best solution to relieve this administrative burden may be partnering with a professional employer organization (PEO.) Lyons HR provides business-critical HR functions for small to midsize companies who may not have the bandwidth to manage them entirely on their own. This includes offering ACA and other regulatory compliance assistance. We’ll help keep you compliant, minimize any financial risk, and protect your business assets. Contact us today to learn more.