Managing a business comes with significant challenges, from overseeing daily operations and managing your employees to staying compliant with regulations that are constantly changing.
The Affordable Care Act (ACA), while aimed at increasing access to healthcare, may add another layer of complexity for you. If you have 50 or more full-time equivalent (FTE) employees, ACA compliance isn’t just important, it’s the law.
But don’t worry, we’re here to help simplify and navigate it!
What Does ACA Compliance Mean for Small Businesses?
At its core, ACA compliance means providing health insurance that meets certain minimum standards and affordability guidelines to your full-time employees (those working 30+ hours per week). Non-compliance can result in hefty penalties, so understanding your obligations is critical.
Here’s what you need to know as a small business owner:
- Affordable Coverage: The ACA defines coverage as affordable if an employee’s premium for self-only coverage doesn’t exceed 9.02% of their household income in 2025.
- Minimum Value Standard: Health plans must cover at least 60% of the total allowed cost of benefits.
But how do you determine who qualifies, track hours, and ensure your plan meets these requirements? Let’s get into this together!
The Challenges of ACA Compliance for Small Businesses
For many small businesses, ACA compliance can feel like a complex process. Some of the most common challenges we’ve heard are:
- Tracking Employee Hours: Calculating hours accurately is crucial, especially if you have variable-hour employees. Failing to account for their status could result in non-compliance.
- Understanding Coverage Requirements: Many small business owners struggle to determine whether their plans meet the ACA's affordability and minimum value criteria.
- Filing Deadlines: Annual reporting, like IRS Form 1095-C, can be time-consuming and very easy to make errors. Mistakes can lead to fines of up to $280 per form in 2025.
- Do the math, if you have 50 employees and make a mistake on half of their 1095-C forms, that could cost you $7,000 in penalties!
4 Tips on How to Simplify ACA Compliance
Fortunately, there are ways to make ACA compliance more manageable for your small businesses:
- Automate Tracking: Use timekeeping software to monitor employee hours accurately, especially for those with fluctuating schedules.
- Review Your Health Plans: Work with a benefits advisor to ensure your plans meet ACA standards for affordability and coverage. Learn more about what a Benefits Advisor can do for you.
- Stay Organized with Reporting: Keep meticulous records of your employees' hours, coverage offers, and premium contributions to simplify Form 1095-C filing.
- Seek Expert Help: Consulting with ACA compliance specialists or using a comprehensive HR and payroll platform can save time and reduce stress.
How MegaPay Makes ACA Compliance Easier
MegaPay is designed to take the guesswork out of ACA compliance. Our all-in-one payroll, timekeeping, and HR platform offers tools to help you:
- Track Employee Hours: Automated timekeeping ensures accurate calculations for determining full-time status.
- Simplify Reporting: MegaPay provides easy-to-use reporting tools for preparing and filing Form 1095-C, reducing the risk of costly errors.
- Access Expert Support: Our team of payroll specialists are here to prevent mistakes and error when filling out this form. Just get us your information and we prepare your filings!
At Megapay, our goal is to guide you through the complexities of ACA compliance, so you can focus on growing your business. Learn more about our Megapay’s Fractional HR Service!
ACA Compliance Doesn’t Have to Be Overwhelming
By taking proactive steps and leveraging the right tools, ACA compliance can become just another task you check off your list. MegaPay is here to help you navigate the challenges of the Affordable Care Act with confidence (and of course, ease).
Remember: The ACA filing deadline for form 1095-C is January 31st for employee statements and February 28th for IRS submissions (or March 31st if you're filing electronically).
Don’t let compliance stress you out. Contact MegaPay to learn how we can support your business in staying compliant while saving time and resources.