Until very recently, it’s been the role of HR to offer and administer health insurance plans and help employees understand their choices. But now that the Affordable Care Act is in place, that role has become part of a much larger compliance process – one that can directly and significantly affect your company’s bottom line. That’s why it’s critical for your CFO to be part of ACA compliance efforts, and to understand the very real financial implications of noncompliance.
To really grasp the potential scale of penalty exposure, consider that there are penalties both for failing to comply with the Employer Shared Responsibility Mandate (Pay or Play) and for failing to correctly report that compliance. What’s more, the IRS puts the burden of proof for disputing any of these fines on the employer, which will incur more costs.
Your penalty exposure includes:
- $2,000 per employee per year for not complying with the employer mandate
- $3,000 per employee per year if you meet the employer mandate but have individual full-time employees to whom you do not offer affordable coverage
- $100 per employee up to a maximum annual penalty of $1.5 million for not correctly filing the associated IRS forms
- 40% excise tax (the Cadillac Tax) beginning in 2018 on high-cost plans, which are defined as plans with a total cost of $10,200 for an individual and $27,500 for a family. (the tax applies to amounts above those thresholds)
Finally, consider that 100% of our clients have discovered compliance exposure within their own organizations.
If you need more information to engage your CFO on this critical issue, download our whitepaper: ACA Compliance: Everything CFOs Need to Know About the Financial Risks and Opportunities