ACA reporting: What you should be working on right now

With the deadlines just months away, ACA reporting is priority number one for many HR pros. Here’s some help with that monumental compliance task.  

The reporting requirements can be broken down into two categories:

• the forms you need provide employees by Feb. 1, 2016 (Form 1095-C for insured plans), and
• the forms you need to get to the IRS by Feb. 29, 2016(Form 1094-C for insured plans).

And if your company will be filing more than 250 or more returns for 2016, the IRS requires you to do it electronically.

But you do get an extra month to get those forms to the feds – that deadline is March 31, 2016.

Note: The feds recently let employers know that there is a way to get a 30- or even 60-day ACA reporting extension in some situations.

From start to finish

To ensure your firm has everything in order by the time the deadlines roll around, here is a five-point checklist:

1. Keep all key requirements in mind. If you’re an employer with between 50 and 99 full-time employees, you’ve got reporting requirements under the law – even if you qualify for transitional relief or if you don’t offer healthcare coverage.

What’s more, regardless of your own plan year, ACA reporting is based on a calendar year basis and generally must be reported for each month of that calendar year.

2. Make sure everybody is on the same page. The reporting process requires a lot of communication between different departments (HR/Benefits, Payroll, Finance) and, in many cases, a software vendor is also involved.

Example: For many firms, Payroll tracks the hours worked during the measurement period – the period where employers determine workers’ full-time status.

After the tracking, will Payroll also put together a report on each employee’s total hours of service or will that task fall on HR and Benefits? If so, what info does HR need?

3. Make sure all necessary data is being collected. During the plan year, firms should be collecting a variety of data from workers for reporting purposes.

This includes: enrollment and termination of coverage dates, acceptance or coverage waivers, coverage eligibility documents, employee’s share of lowest cost monthly premium for self-only minimum value coverage, wage info (for the Affordability test), documents on coverage offers to employees, and their spouses and dependents.

4. Familiarize yourself with the forms, instructions now. Employers should review the IRS’ instructions and familiarize themselves with the sample forms. This will ensure the process is much smoother come crunch time.

When it comes to the actual reporting, Form 1095-C can be broken down into parts I, II and III (section for self-funded plans).

Because it’s complex and time-consuming, Part II is expected to cause employers’ the most trouble.

Among other things, Part II will be used to track firms’ monthly compliance with the Shared-Responsibility regs and whether employees, spouses and dependents are eligible for a premium tax credits, whether minimum, affordable coverage has been offered and what safe harbor, if any, is available.

5. Doublecheck all reporting. This can’t be stressed enough. The Congressional Budget Office (CBO) is expecting filing errors to be the ACA’s single largest revenue generator over the next decade.