If your dealership management is feeling anxious about new federal mandates under the national Affordable Care Act (ACA), or “Obamacare,” you’re not alone. The ACA goes into effect in 2015 and requires employers to offer health coverage to all full-time employees. If they don’t, they could face fines of as much as $3,000 per employee. That’s a steep penalty that no dealership wants to pay. It’s worth noting that many parts of the ACA are still in flux, so today’s requirements and penalties are likely to be a moving target in the coming months. However, the basic framework of the ACA is here to stay. That means now is the time to ask questions and make sure your reporting process is buttoned-up for 2015.
The good news is that your payroll team doesn’t have to go it alone. We’re handling things on our end with our dealer management system (DMS) to make complying with the ACA a smoother and easier process. Here’s what you can expect:
New reporting functionality
Reporting for 2014 is optional, reporting for 2015 is mandatory. On February 28, 2016, employers must submit the first health care reports to the IRS. Called 1094-B (Employer Level Data) and 1094-C (Employee Statement), the reports will show that employers have offered health care coverage to all employees working over 30 hours a week during the 2015 calendar year. As you can imagine, employee status may change throughout the course of the year. Every once in a while, for example, you may need Joe to work an extra four hours a week, which could push him over the 30-hour threshold. While it would make more sense to give those hours to an employee who is already working full time, sometimes that’s not an option. If you’re thinking that tracking this type of information could turn into a logistical nightmare, don’t worry. We are in the process of adding these reports to the DMS, at no extra cost to you. The reports will automatically update, so at any time you can check the status of every employee. If an employee goes over the hourly threshold one month and is consequently eligible for coverage, you’ll know it. At the end of the year, it’ll be a snap to run the complete reports.
New e-filing capabilities
The other side of the equation is submitting the reports to the IRS. Here again, we’re committed to making this step as easy as possible for your team by adding electronic filing to the Payroll Application within the DMS. While the ACA mandates that only employers with over 250 employees must file electronically, we will offer this new capability to every customer.
As more of the requirements of the ACA are phased in, we’ll continue to evaluate our processes and keep you up-to-date on what you can expect. In the meantime, keep an eye out for release notes about when this new reporting functionality will be available.
Chris Lacy is a product manager for Dealertrack DMS.