ACA compliance pitfalls advisers need to know about
July 7, 2015 1:19 AM
Overview
Three key areas of ACA compliance advisers should focus on include 1) compensable time; 2) worker classification; and 3) job description. Unless fixed, these areas can all but eliminate a clients hope of being compliant with the ACA, Karen Kirkpatrick, owner of On Your Mark Consulting, said recently at the NAHU annual convention in New Orleans.
[Image: Fotolia]
[Image: Fotolia]
Common law vs. 1099 employees
Compensable time can determine applicable large employer status, Kirkpatrick said, and its crucial to correctly define workers as common law employees or independent contractors. The employer mandate protects common law employees but doesnt protect 1099 employees, she said.
To view the IRS 20-step test to determine employment status, click here
[Image: iStock]
To view the IRS 20-step test to determine employment status, click here
[Image: iStock]
Donning and doffing
When applicable, advisers need to make sure their employer clients are including the time employees use for putting on and taking off protective gear when counting their total hours worked. That time could put a part-time employee over the ACAs full-time threshold of 30 hours a week or 130 hours a month, Kirkpatrick said.
[Image: iStock]
[Image: iStock]
Waiting period
Last year, the 90-day waiting period went into effect, meaning group health plans must offer coverage to any eligible employee within 90 days.
[Image: iStock]
[Image: iStock]
Be careful
Compliance can be tricky, Kirkpatrick said. A client can be in compliance with the waiting period rule and not comply with the employer mandate, she said. Not all parts of the ACA play well together.
[Image: iStock]
[Image: iStock]
Know the ACA definitions
Advisers need to watch out for discrepancies between the worker classifications given by the employer and ACA definitions. An employees classification might say they are part-time, however, if they work 30-hours a week, they are considered full-time under the ACA. There are definitions, then there are ACA definitions, Kirkpatrick said.
[Image: iStock]
[Image: iStock]
