The Affordable Care Act (ACA) is having an effect on businesses across the country and a nonprofit agency is no exception. One of the main factors determining how your agency will be affected is based on the number of full time equivalent employees your agency employs. To see the IRS definition of a Full Time Equivalent Employee (FTE) go to: http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-Questions-and-Answers:-Determining-FTEs-and-Average-Annual-Wages. There are three FTE benchmarks to consider: Those businesses with fewer than 25, those with fewer than 50 employees and those with 50 or more employees.
For organizations with less than 25 employees the Small Business Health Care Tax Credit is available. For nonprofit organizations this credit is actually a refund on quarterly payments that have been made for income tax or Medicare withholding from employee wages.
For organizations with less than 50 employees the Small Business Health Options Program (Shop) is available to help provide health coverage to your employees. The program is designed to help you customize an available health insurance plan by controlling the coverage provided as well as the amount of employer contributions. For a more detailed look at SHOP please visit https://www.healthcare.gov/small-businesses/provide-shop-coverage/shop-marketplace-overview/.
For employers with over 50 employees there are certain notifications required to be given to employees as well as additional “information filing” responsibilities from the employer. Section 6056 of the ACA has introduced IRS forms 1094-C and 1095-C as part of the information return filing. The 1094-C and 1095-C are currently scheduled as a requirement to begin in 2016 for 2015 data.
These are just a few comments on the ACA and how it affects nonprofit organizations. For a more detailed summary of these provisions, you can visit: http://www.councilofnonprofits.org/how-will-affordable-care-act-impact-nonprofit
As with all other reporting requirements, GMS, Inc. will provide all necessary forms and procedures in a timely manner. Furthermore, early in 2015 GMS will provide its clients with a recommendation on gathering cumulative information that will ultimately become part of the IRS forms once available.