Obamacare has been bringing a lot of changes for small business owners, and they can expect a lot more of that in the coming years. Since the enactment of Affordable Care Act, there have been several modifications in the law, which has required small business owners to struggle to remain compliant.
2016 is no exception to these modifications. This year more SMBs are required to offer coverage to their employees and furnish new reporting requirements with much more paperwork required to stay compliant. With these ever-changing Obamacare requirements, small businesses are advised to plan the best they can so that they don’t face the harshness of associated penalties.
More SMBs Are Required To Offer Coverage
Under the employer mandate section of Obamacare, more small business employers are mandated to offer healthcare coverage to their employers, starting from 2016. Small businesses that have 50-99 full-time equivalent employees (previously excluded from providing necessary coverage) must provide coverage to at least 95% of their employees. Failing to perform so will force them to pay penalties (exempting first 80 employees as of tax year 2015 and first 30 employees as of tax year 2016) as heavy as $2,000 per employee.
Along with this, owners of several small-sized companies having a combined total of 50 or more employees are also required to offer insurance, irrespective of the fact that each of the individual companies has fewer than 50 employees.
New Tax Forms Requirements
This year is also marked as the year of first-ever ACA reporting where businesses are required to complete and submit a number of forms (1095-B, 1095-C, 1094-B & 1094-C) with details like cost of coverage, employee names and their and their dependents’ Social Security numbers, etc. These forms will then be used by the government to determine whether the necessary coverage was provided to the employees or not. As no one actually knows how the reporting will actually look like, the initial deadlines provided by ACA have been extended so that business owners can prepare well to comply with the regulations.
Audits Are Also Likely To Rise Due To Increased Compliance Requirements
Just staying compliant with the reporting requirements is not enough; business owners must ensure that it is done in a right way with correct information sent to the authorities. If the correct information is not disclosed appropriately or the required documents are not maintained then they are likely to face more and harsh audits, which might lead to more legal complexities. Unlike large companies, small businesses don’t have a company attorney who makes sure that everything is done in a correct manner, thus they are required to be more careful and involved in the process.
While many small businesses were aware that the change was coming, there are many who weren’t planning enough for it. These organizations are going to get badly hit with the whole lot of new compliance requirements. Well, you still have time to collect everything and be well prepared for the incoming legal requirements. Moreover, partnering with the right technology partner can aid the ease of complying with the law, without having to fear for any penalties and focus on other strategic areas.