With the deadlines just months away, ACA reporting is priority number one for many HR pros. Hereâs 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 â 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 youâre an employer with between 50 and 99 full-time employees, youâve got reporting requirements under the law â even if you qualify for transitional relief or if you donât offer healthcare coverage.
Whatâs 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 â the period where employers determine workersâ full-time status.
After the tracking, will Payroll also put together a report on each employeeâs 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, employeeâs 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 IRSâ 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 itâs complex and time-consuming, Part II is expected to cause employersâ the most trouble.
Among other things, Part II will be used to track firmsâ 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 canât be stressed enough. The Congressional Budget Office (CBO) is expecting filing errors to be the ACAâs single largest revenue generator over the next decade.
For more HR News, please visit: ACA reporting: What you should be working on right now
Source: News from HR Morning