Our Abila experts have researched and crafted Key Nonprofit Accounting Predictions for 2015to help you gain a clear understanding of the challenges facing your sector in the coming year, and how you can turn them into real advantages for your organization.

 Below is a deep dive into Nonprofit Accounting Prediction #5 –Patient Protection and Affordable Care Act Compliance.

You have some big hurdles ahead when it comes to complying with the Patient Protection and Affordable Care Act (PPACA). Perhaps the biggest is the filing of impending IRS form 1095-C. Similar to the W-2 form, 1095-Cs will need to be prepared for each full-time equivalent (FTE) employee, at organizations with 50 or more full-timers. And, though the first filing deadline for 1095-C forms isn’t until February, 28, 2016, you’ll want to get a running start to successfully make this leap.

Here’s a little background from PricewaterhouseCoopers: “Employees working on January 1, 2015 with or without healthcare coverage will create reporting requirements for their common law employers. These reporting requirements will likely be complex and burdensome. Because the required information may not be readily available, advance preparation by employers is necessary.”

A little terrifying, right? It doesn’t have to be, particularly if you start the wheels in motion now.

First, know what your reporting obligations will be. Often, organizations are already tracking the required data for internal purposes. You’ll need to report:

  • The offer of health care coverage to your employees (along with proof it was extended to 95 percent of your FTEs)
  • Employee enrollment numbers
  • The affordability of your plan
  • Whether or not it is a “qualifying offer” (an offer is qualifying if it meets the Federal Affordability Standards and the minimum federal requirements of coverage)

Second, know what changes need to be made to meet these obligations. I suggest conducting a thorough evaluation of your systems. To effectively track and report the information required on 1095-Cs, you may need a new HR system or, at the least, updates to your existing technology. Additionally, investigate whether changes to your organizational structure could mitigate excise tax exposure and/or reporting obligations.