How Can Staffing Firms Stay Compliant?

The IRS just concluded Good Faith Transitional Relief for incorrect or incomplete Affordable Care Act (ACA) reported commencing the tax year 2021. This indicates the time for facing increased penalties for ACA non-compliance. Simultaneously, various agencies face significant staffing challenges and a vast post-pandemic-related backlog of paperwork.

So, if you are a staffing owner glancing for guidance or solutions about ACA compliance in 2022, we got you covered with a quick guide stating:

  • On what compliance looks like
  • what the penalties 
  • where to turn for the guidance you need 

ACA’s Employer Shared Responsibility in 2022

The ACA has undergone multiple changes down the line; the ACA’s Employer Shared Responsibility provision is still very much in effect and being implemented. 

Applicable large employers (ALEs) - those with 50 or more full-time employees and full-time equivalent employees during the preceding calendar year - must still comply with these requirements in 2022:

  • The employer has to provide affordable and adequate coverage (according to IRS standards) to all full-time employees throughout the calendar year or face a potential penalty.
  • Fill out & file Forms 1094 and 1095 with the IRS.
  • Form 1095-C statements should be provided to employees accurately and promptly.
  • Manage employee eligibility and compliance actively.

Pro Tip: Set your reminder for completing & filing forms accurately to avoid facing stiff financial penalties.

Types Of  Penalties

There are diverse routes to fall short of your ACA compliance and get yourself hit with penalties. Here are the primary types to know:

4980h(A) – Neglect To Offer Coverage To At Least 95% Of Employees. 

Suppose the employer fails to deliver minimum fundamental coverage to at least 95% of its full-time employees for their essentials, then? In that case, it makes those employees eligible for receiving a Premium Tax Credit. In the last year, ALEs filed a fine of $2,700 per full-time employee.

4980h(B) – Neglect To Deliver Affordable, Minimum Value Coverage. 

If you think to escape by just offering coverage to your 95% of employees, then that's not the case. The IRS has filed the Employer Shared Responsibility penalty for failing in providing coverage that meets the minimum value & affordability standards. It costs $4,120 annually per full-time employee that receives a Premium Tax Credit. So, you can still be subject to the second type of penalty.

Failure to furnish Form 1094-C or 1095-C. 

If employers fail to deliver accurate 1094-C or 1095-C forms to employees, then the employers will have to undergo a penalty of $280 per form, which doubles to $570 for intentional disregard.

How Shall The Staffing Firm Overcome This?

The favorable news is that there are several visionary approaches staffing owners can take to help control costly penalties like:

Check Your Form 1094-C And Form 1095-Cs Carefully 

Kindly ensure that the forms you file with the IRS and deliver to your employees are authentic. For instance, on Form 1095-C, ensure the “Yes” box is checked or if minimum essential coverage was presented for all 12 months. On 1095-C, scrutinize the codes to bypass combinations that may trigger assessments.

Find Software That Aids Your Pain

Sometimes the best approach you can make for your staffing business is to admit that you need expert software solutions to aid your complex topics. And software like NextCrew is the perfect fit for your staffing industry, solving your pain areas by just sending reminders.

So, why wait to quench your search? Connect the expert today!

NextCrew - On-Demand Staffing Software

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