Health Insurance Licensing, ACA Noncompliance, and Your Company’s Compliance: What Does it All Mean?


If you’ve seen the recent news about the Founder & CEO of a ‘modern technology broker’ resigning amid an investigation by the California Department of Insurance, you might be wondering: “So what?” And if you aren’t using that particular technology broker, you may be thinking this is an isolated incident that has nothing to do with your company’s compliance.

But it’s more than that.

In fact, this story has implications for every small- and mid-sized business and their employees. That’s because the possibility of non-compliance and the risk of large penalties for being non-compliant are real concerns.

Luckily, if you pay attention to the most pressing compliance requirements and place your trust in the right insurance broker and software, you can do your part to ensure compliance doesn’t become a costly mistake for your company. This is why we believe in the value of trusted advisors. The moral of this story may be that vetted, trusted advisors can be a much lower risk option than call center insurance salespeople at a startup.

 Noncompliance Costs Have Practically Doubled in Early 2016

On June 29, 2015, the Trade Preferences Extension Act was signed into law. Under it, employers are now subject to greater financial penalties, particularly with regard to reporting requirements.

Consider these increased costs:

  • Failure to provide forms to employees or providing incomplete/incorrect information
    Was $100/form and $1.5 million annual maximum; is now $250/form and $3 million annual maximum.
  • Failure to file form with the IRS or providing incomplete/incorrect information
    Was $100/form and $1.5 million annual maximum; is now $250/form and $3 million annual maximum.
  • Intentional disregard of requirements
    Was $250/form with no annual maximum; is now $500/form with no annual maximum.

With penalties practically double, it’s vital that you choose a broker who is not only licensed, but experienced and knowledgeable on compliance and other factors that matter most to your organization.

The 5 Top Healthcare Compliance Concerns of Small Businesses are Alike

For that matter, even large employers (i.e., companies with 100 or more full-time or equivalent employees) share similar concerns over Employer Shared Responsibility and ever-changing reporting requirements.

If you’re operating a small company, there are a few important compliance-related matters you’ll want to be on top of:

  1. Exchange Notice Management
    Small employers must notify employees that the Affordable Care Act’s Health Insurance Exchanges are available.
  2. Benefits Plan Structure
    Benefits plan structure requirements vary depending on the types of benefits offered. However, you must meet certain standards, such as covering preventive care without cost-sharing.
  3. Eligibility and Enrollment Requirements
    There are eligibility and enrollment requirements that must be followed throughout the year.
  4. Minimum Essential Coverage
    All employers are required by law to provide minimum essential coverage for their employees.
  5. Full-Time Employees
    With increased fees and costs of having over 50 and 100 full-time or equivalent employees, companies make hiring decisions based upon these thresholds (and you should do the same).

Being mindful of these top issues is important, especially considering the major penalty changes already taking place in early 2016.

Do Your Due Diligence to Keep Your Company Compliant at All Times

At Flock, we don’t believe in cutting corners. Instead, we bend over backwards to ensure that when you choose our HR, benefits and compliance software, you’re partnering with expert brokers who are ready and able to help small business human resources departments through the process (meaning that the issue of non-compliance should never cross your mind). They have many years or decades of experience managing compliance for themselves and their clients.

The best part is Flock’s powerful software includes data and analytics that will always be compliant with State and Federal law, no matter how often the Affordable Care Act regulations and requirements change.

Ready to take the guesswork out of compliance? Sign up for Flock today and get partnered with a knowledgeable and properly licensed broker who can offer the support you need (with no unwelcome surprises along the way).

We want to hear from you: Are you comfortable with your broker’s ability to keep you compliant? Do threats of noncompliance distract you from other tasks that need attending to? Share your thoughts in the comments below!