When it comes to the Affordable Care Act (ACA or Obamacare), the dreaded employer mandate has received most of the attention. But there are other Obamacare provisions that demand employers' attention and carry their own penalties for non-compliance.
For example, there are "market reforms" that have added protections for participants in group healthcare plans, such as the requirement that plans extend dependent coverage to children up to age 26. To ensure that employers are in compliance with these market reforms, the Department of Labor recently announced that its COBRA audits will now include ACA audits. Just one violation could result in a penalty of $36,500.
Employers, including recruiters if they employ their contractors and/or in-house employees, could encounter an audit of their ACA-related documents if they are subject to COBRA audits. Our third party COBRA administrator, Infinisource, recommends that employers keep an easily accessible binder or file that includes the following documents:
Each violation could result in an excise tax of $100 per day for each individual affected. That means that a single mistake that affects only one person for an entire year could cost an employer $36,500.
It is important to note that, unlike the employer mandate, the market reform provisions are not limited to employers with 50 or more full-time employees. If you provide a group healthcare plan, you must comply with the market reforms even if you don’t meet the 50-employee threshold. The only way to be exempted from SOME of the provisions is if you have a grandfathered plan. If the market reforms apply to you, you should be prepared for an ACA audit. If it does not, you should warn your clients who may be subject to these audits.