Page 25 - December 2018 | Cleveland Metropolitan Bar Journal

of $300,000 because the IRS transposed
data from the information reported into its
software. This employer had to prove it was
in compliance to eliminate the penalty.
• An employer that was otherwise in
compliance left a reporting month blank
during a month in which it did not employ
the employee. The IRS incorrectly assessed
a penalty. This employer had to show that
the employee was not employed during that
month and that the coverage offered in later
months was affordable.
• An employer that was in compliance with
the affordability requirements had to prove
to the IRS that the coverage was affordable.
The IRS took the improper position
that coverage can only be affordable if it
complies with an “affordability safe harbor.”
The employer had to prove affordability.
These are just a few examples of ACA-
compliant employers that had to take extra
steps and incur extra expense to prove their
compliance to the IRS.
A prudent employer will continue to maintain
ACA compliance. Some basic steps include:
1. Proper documentation of the employer’s
calculation of applicable large employer status;
2. A clearly defined employee eligibility
provision within the group health plan
document;
3. Proper tracking of employee hours to Helping you navigate
determine who should be offered coverage;
4. Documentation that offers coverage options through difficult
that are affordable for each employee;
5. A plan in place to quickly gather the
appropriate information from the various financial issues.
employer information systems to complete
the Form 1095 on time; and Our experienced • Economic Damages
6. A review of Form 1095 prior to filing, • Fraud Investigation & Deterrence
rather than simply relying upon the forms financial experts
generated by software. will help your • Valuations for Estate & Gift
These recommendations are no different clients with: • Business Valuations
from what we have been advising employers • Insolvency & Restructuring
for the past several years. With the increased
IRS enforcement, the need for a compliance
strategy is more evident than ever. Jeff Firestone, CPA, CFE, CVA
Director of Litigation Services

Jeff Smith is a partner in the PHONE 440-892-8900 ext. 113
Cleveland office of Fisher Phillips EMAIL jeff@mcmanamonco.com
and a member of the firm’s Employee WEB www.mcmanamon.com
Benefits Practice Group. He works
with clients to create, implement
and maintain their retirement and health plans.
He joined the CMBA this year. He can be reached
at (440) 838-8800 or jdsmith@fisherphillips.com.
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