E-filing Accepted confirmation from IRS_Integrity Data ACA Compliance SolutionAt 7:49 a.m. CDT on Friday, October 2, 2015, Integrity Data’s Affordable Care Act compliance team received confirmation from the IRS that test submissions for Tax Year 2014 passed all the check points for electronic filing of employers’ ACA returns.

By earning verification that its ACA reporting software works in the new IRS system called AIR (Affordable Care Act Information Returns), Integrity Data now has clearance to e-file – as soon as the IRS is ready at year-end – Forms 1094-C and 1095-C on behalf of its customers for Tax Year 2015.

At a time when employer uncertainty for the first ACA filing season is such a hot topic, an added detail in this news is significant – and a point of pride for Integrity Data:

We were only the third organization to get this approval. 

Integrity Data’s testing was done through AATS (Affordable Care Act Information Returns Assurance Testing System), a portal opened July 29, 2015. AATS is the technical gate not only for filers of the 1094-C and 1095-C forms that are required of employers, but also for filers of the 1094-B and 1095-B returns required of insurers.

Though e-filing is recommended for all ACA returns from employers and insurers, it is mandatory for any organization with 250 or more submissions.

The first electronic transmissions of ACA returns from employers and insurers are due to the IRS by March 31, 2016. Employers, insurers, and any IT department or software vendor filing on behalf of an employer or insurer must allow time to apply for transmission credentials with the AIR system and then, as Integrity Data has, meet the testing requirements unique to the AIR system.

Why the urgency for access to the AIR system?

The new 1095-C and 1094-C returns due from employers represent the most stringent workforce reporting yet. Employers must produce these mega-exacting forms for their employees and then file them with the IRS – for the first time – in Q1 2016.

  • Producing 1095-C forms is complicated enough. These year-end statements aren’t just summaries based on wages. They are a year’s worth of monthly declarations of coverage offers and plan attributes – all based on a sophisticated calculation of employee hours in order to document eligibility.
  • For files with these super-detailed fields and most-specific codes, getting the transmittal to the IRS (Form 1094-C) in a readable format presents another – and new – set of challenges for the organizations that are e-filing.

AIR system_ACA educational slide by Integrity DataThe AIR system that must accept these files is brand-new, multi-tiered and – like the intricate statements it will process – puzzling to navigate.

This mammoth processing engine, which represents a $921.1 million IRS investment so far, is where enforcement of ACA penalties will happen. When the IRS cross-references these returns in data feeds from the exchanges, individuals, insurers and employers, it will be able to identify where to send penalty notices.

Anyone who already has e-filing credentials with the IRS, and now intends to submit ACA files, must go through an entirely new set of hoops in order to gain access to the AIR system. Credentials with the FIRE system for 1099 returns will not work for transmissions of ACA returns.

What tests must be passed