Here’s hoping summer has been good to you. Here is hoping you enjoyed the sunshine, warmer temperatures, and time spent with family and friends. But summer is now waning. That means it’s time to get back into the thick of things. And where health plans are concerned, it means talking about Affordable Care Act (ACA) compliance.
We recently published a post designed to inform readers that the IRS appears to be moving more aggressively against companies they suspect are not complying with the ACA’s employer mandate. We urge you to read that post if you haven’t already done so.
For now, though, let us talk about some common ACA compliance issues and how to avoid problems with the IRS. We’ll start by understanding the difference between seasonal workers and seasonal employees.
A Subtle but Real Difference
There is little difference between seasonal workers and seasonal employees in the real world. But that is not the case where the IRS and ACA compliance are concerned. For the purpose of enforcing the employer mandate, there is a subtle but real difference between the two.
Seasonal workers are employees who come to work only on a seasonal basis. They might work during the busy summer tourist season or as retail help during the annual holiday shopping season. At any rate, whether they work full- or part-time is irrelevant. Because they are considered temporary workers who will be gone once the season ends, they are not subject to the provisions of the employer mandate.
Seasonal employees also come to work at certain times of the year or to help manage certain types of events. They can be either full- or part-time employees whose employment is expected to last for no longer than six months. Once a seasonal employee works full-time for more than six months, he is now considered a regular full-time employee for ACA purposes.
Tracking Summer Hours
One of the more difficult aspects of ACA compliance during the summer season is tracking work hours. A lot of companies end up with jumbled summer schedules due to vacations, seasonal needs, etc. But accurate calculations are necessary to properly determine eligibility under the ACA.
We recommend going the extra mile to review time and attendance records at the end of each pay period. In addition to regular reviews, detailed records should be kept at all times. That way, an employer has the necessary data to prove compliance in the event of an IRS audit.
Implement a Compliance Plan
There are other things to consider in terms of maintaining ACA compliance during the summer months. Time and space do not allow us to discuss them in this post. Instead, we move on to the concept of implementing a compliance plan. Every company affected by the employer mandate should have a plan in place.
A strong compliance plan begins with understanding the employer’s responsibilities. The IRS provides all the necessary information on its website. HR consultants and third-party health plan administrators can help, too.
Next, a good plan includes policies and strategies for collecting information, verifying its accuracy, and creating the necessary records companies need to protect themselves. All the processes should be thorough enough to accomplish their goals but easy enough to not require a ton of time and effort.
ACA compliance has taken on a new level of importance at the IRS. As the summer fades into fall, make a point of reviewing your company’s compliance. If you see any holes, address them as soon as you possibly can. Do everything within your power to avoid being audited.