Awesome content, even better software. Just think what our technology could do for you.
How to Prepare for ACA Reporting
Year-end processing is quickly approaching, and with it comes the burden of Affordable Care Act (ACA) reporting. With so much information to gather, review, and report, ACA reporting can be a very stressful process. How prepared is your company for upcoming ACA reporting? In this article, we’ll discuss the employer mandate requirements for ACA reporting and how you can better prepare this season.
Common ACA FAQs
What Is ACA Reporting?
Who Has To Report To ACA?
What Is ACA Filing?
Will ACA Reporting Be Required In 2021?
What’s an Aggregated ALE Group?
What’s Minimum Essential Coverage?
What Is an Applicable Large Employer?
An applicable large employer (ALE) is an employer with an average of at least 50 full-time employees. This can consist of multiple organizations grouped together, or a single organization.
ACA reporting deadlines for 2020:
|January 31, 2021||Supply Forms 1095-C to employees.|
|February 28, 2021||File paper Forms 1095-C with transmittal Form 1094-C.|
|March 31, 2021||e-File Forms 1095-C with transmittal Form 1094-C.|
Preparing Forms 1095-C
Form 1095-C is the employer-provided health insurance coverage and offer form. It reports information about each employee, and it consists of two parts:
- Part I Employee and Applicable Large Employer Member (Employer): Provide general employee and employer information such as names and addresses.
- Part II Employee Offer of Coverage: Indicate the type of coverage offered if any using the provided IRS codes, the lowest cost monthly premium for the employee, and the applicable safe harbor codes.
ACA Reporting Tip
Employers must furnish Form 1095-C to the employee only. Employees should provide a copy of this form to any family members covered under the self-insured, employer-sponsored plan listed in Part lll.
Preparing Forms 1094-C
Form 1094-C s a combination of employee and employer reporting. This form reports a summary of health coverage and offers for each employer to the IRS. It also transmits Forms 1095-C to the IRS. It consists of four parts:<[/et_pb_text][/et_pb_column][/et_pb_row]
Part I Applicable Large Employer Member (ALE Member)
In Part I, you will provide general employer data such as name and address. You will also provide the total number of Forms 1095-C submitted, and if it is an authoritative transmittal.
Part II ALE Member Information
In Part II, you will enter the total number of forms filed on behalf of the ALE Member. You will also indicate if the ALE Member is a member of an Aggregated ALE Group. Finally, you will specify any certifications of eligibility that apply (i.e., Qualifying Offer Method).
Part III ALE Member Information - Monthly
In Part III, you will indicate if minimum essential coverage was offered, as well as the full-time employee count for the ALE Member. You will also enter the total employee count and the months the ALE was a member of an aggregated ALE group.
Part IV Other Members of Aggregated ALE Group
In Part IV, you will enter the names and EINs of other ALE Members of the Aggregated ALE Group (if applicable).
Perform an ACA Audit
Run an audit on your past 1094-C and 1095-C filings during the summer for better year-end preparation. Performing an inspection can catch any errors in previous filings.
This will ensure your organization won’t be duplicating last year’s mistakes before ACA reporting officially begins. Auditing saves your organization time and stress by proactively fixing any errors to avoid penalties.
Proactively Check for Errors
The IRS requires that employee information on Forms W-2 and Form 1095-C match their social security cards.
If an employee has a hyphenated last name on their social security card but not on their Form W-2 or Form 1095-C, the IRS will count this as an error.
Obtain Taxpayer Identification Numbers (TIN) and correct any other information now by checking your employee records. You may also use a provider that offers an error-checking algorithm to automate the process.
Watch for IRS Penalties
The penalties for failure to file complete, accurate Forms 1095-C and related forms by the March 31st deadline are up to $270 per return. If the IRS determines that failure to file was intentional, the penalty is $550 per return.
Be Aware of ACA Reporting Extensions
If you plan to file for an ACA reporting extension, make sure you set a deadline that gives you ample time to apply. Submit Form 8809 on or before the due date of the return for an extension.
Review Your ACA Strategy
If your company is subject to the Employer Mandate, start reviewing your current ACA strategy. Then, determine what method of section 6056 reporting you plan to use. It’s crucial to approach ACA reporting with a team effort, aligning HR, finance, and your company’s accountant or tax advisor.
Using a system that accurately tracks and records coverage provided for full-time employees every month will better prepare you for year-end processing.
When reviewing your current ACA strategy, consider the following:
Do you have systems in place to accurately track and manage ACA compliance, including employee statuses, benefits administration, and variable hour employee tracking?
Prepare with a Partner
If your company is looking to partner with a trustworthy provider, it’s essential to look at the ACA compliance and reporting services offered. When vetting payroll and HR providers, review the features and benefits their solutions offer. Make sure their solutions will best fit your needs and will work with your compliance strategy. Find out if the vendor provides the following ACA services:
How APS Can Help
APS offers an ACA compliance and reporting solution that takes the complexity out of the ACA. Our error-checking algorithm ensures codes are valid, and data is formatted correctly for reporting.
Accurately capture and report health plan coverage information to the IRS with pre-populated forms. ACA tracking has never been easier. We’ll even e-file for you.
Business Administrator, Christ’s Church
The support for onboarding is excellent and their customer service is top notch. APS worked to get all of our needs met, and they continue to be problem solvers for us. Initially, I needed help navigating the system and they worked with me until I was comfortable and confident using the system.
Check out more great articles from the APS Blog covering HR, payroll, and everything in between.
The open enrollment process can be chaotic and unorganized. Here is a list of tips you can use to crush your open enrollment.
Learn about the different reporting methods for 1094-C and 1095-C ACA annual reporting so you can maintain compliance.
In this article, church leaders will learn how to identify payroll and HR technology challenges in their existing systems. They will also learn how to improve their employees’ experience while working for the church by closing those gaps.
In this article, we’ll discuss the 4 benefits of switching to paperless payroll to save you time, money, and eliminate potential errors.
In this article, we’ll explain how to identify common learning types and how you can train your employees in an engaging way.