Axim Overview

Contractor's Guide to ACA

As if government contracting weren't complicated enough already, the Affordable Care Act (ACA) places additional pressure on contractors (cost increases and new compliance requirements) which ultimately affects their bottom lines. This Contractor's guide to ACA provides an overview of the new ACA laws along with insights on how these changes affect contractors. The Essentials of ACA   Who's affected? As of January 1st 2016, any company with 50 or more full-time employees now has to comply with the rules of the Affordable Care Act. Who's considered a full-time employee? Any employee with 30 or more hours a week. And if you're thinking there's some sort of loophole in those numbers to keep you out of the ACA... Good Luck. The government has worked really hard to close any loopholes. If you're a business of this size... you better get ready to comply with the ACA. ACA "what's required"   What's required? You must provide proof that you offered the minimum amount of coverage and affordable coverage to your employees. Essentially, think of ACA as a minimum wage for health care coverage. A basic amount employers are supposed to provide. What gets tricky is if set employer asks the employee to contribute to the coverage. That contribution must be deemed affordable (below a certain percentage of their salary). It's a difficult balancing act. When should it be done? Every single month... you have to show you met the minimum amount of coverage (and affordable rates) to your employees. If you don't or if you make a mistake, it can cost you between $50 - $500... and that range is determined by when you catch that mistake. So between submitting reports and auditing yourself to be sure you got the correct info you're going to be doing compliance reporting... often. ACA "Where can I find info"   Where can I find this info? Simply put, you're going to have to look at your own payroll record to find the information necessary. You'll have to prove how much you spend per employee on their health care coverage and what they (employees) individually contributed towards that coverage. You must be sure that employee contribution is not too much of their actual pay. You'll have to run those numbers for every single employee, each month, and it's going to have to come from your own tracking along with your health care provider. ACA "why should I do it"   Why should I do it? Because doing so ensures your companies' health for the future. The consequences of violating ACA rules could permanently damage or cripple a business and the danger lay in the "per violation fine structure". If a company messes up someones ACA reporting for the year, it counts as 12 violations (one for each month). The fine is then multiplied by 12. With that type of exponential fine structure, it wouldn't be hard to damage profitability or even destroy a business. Now that we've got a basic understanding of the ACA rules, let's take a look at how being a contractor makes reporting this information even more difficult. If you've been in contracting for a while, you know it's not a 9-5 job. Sometimes there's more work than one can handle and other times there's not enough work to go around. The challenge this presents for ACA reporting is it constantly redefines what affordable coverage means to an employee. One month a contribution may be deemed affordable, but the next month (if wages are lower) it could be deemed un-affordable and thus an ACA violation. ACA violations trigger DOL audit   In addition to all the extra payroll reporting contractors already have to do... Workers Comp reports, Union Fringe reports, and Government Fringe reports, they now have to track that they provided the minimum amount of coverage according to ACA guidelines AND they also must be certain that their employees' contribution to their health care plan is deemed affordable despite their employees constantly varying pay. It's significantly more difficult to be a contractor and run an office of salaried workers. Because ACA reporting is even more complicated for contractors, they're going to have to make additional room in their G&A overhead budgets to take on this new reporting burden. ACA cash fringes   There's still probably a few contractors who think they're going to go around this whole ACA issue by just providing cash fringes. While that might satisfy SCA compliance requirements, it won't work for the ACA. And while every contractor should be concerned about ACA fines, it's really only the tip of the iceberg. Having an ACA violation could lead to a full blown DOL Audit of all your government contracts (wages, fringes, everything). Last year 3 out of 4 contractors, when audited by the DOL were found to be in non-compliance. Small ACA violations can lead to bigger and worse DOL penalties for a contractor. Contractors are stuck holding the ball. Payroll companies don't necessarily track employer's contributions to individual health care plans. Insurance companies don't track varying wages involved with government contracts. Neither company will be able to provide a contractor with a full solution leaving him/her to do it themselves. A new solution for contractors: Axim Fringe Solutions Group is specifically designed for government contractors. That means we can keep your business ACA compliant while keeping your contracts SCA compliant. Since our fees come out of the government fringes you're required to spend anyway... we can reduce your stress, overhead, and G&A at no additional cost. DOL compliance 100% guarantee   In addition, the one offer Axim can make you that no other company can match is our 100% guarantee in the face of a DOL audit. If we're in charge of your compliance and you get audited... not only will we perform the audit for you, but any penalty found will be paid 100% by us. That way you don't have to worry about anything, but what you do for your business. Follow Axim Fringe Solutions Group on Twitter & LinkedIn. [embed][/embed]      

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