Content updated on November 16, 2016.
With the 2015 reporting period behind us for the brand new required IRS reporting around the Affordable Care Act, we can now reflect on some of the issues that we overcame to become more prepared for 2016. So what were some of the lessons we learned? The amount of work to be done can be overwhelming – from complicated forms and compliance regulations to data gathering and processing, the whole ACA process is full of twists and turns.
- Data requirements and forms – The amount of information required to document compliance and complete IRS Form 1095-C is extensive. Companies were on a steep learning curve from the start, with little help from vendors.
- Measurement periods, minimum essential coverage, minimum value, safe harbors – companies realized that ACA compliance is not a straight road. What they thought was compliant coverage might not have been true for every employee in every situation.
- Guidance was not always stellar – When it came to third party information, there was no standard of guidance. Many companies were given incorrect advice which led to problems at year-end.
- ACA systems and solutions – Many compliance solutions did not allow companies to track ACA on a monthly basis, leaving compliance as more of a guessing game. Many companies lacked payroll and HR systems which would allow them to gather all the necessary information.
So, you may be asking, how do we make sure that 2016 is more efficient and less overwhelming? Carol Czarnecki outlined a few ideas in her article, “United States: Lessons Learned from First ACA Reporting Period.”
- Prepare a filing timeline – There are two important dates to remember: March 2, 2017 and March 31, 2017. 1095-B and 1095-C forms must be given to the employee by March 2, 2017. IRS Forms 1095-B and 1095-C must be paper filed by February 28, 2017 or e-filed by March 31, 2017. Having these dates in mind should begin the process of gathering information to ensure timely filing. Remember: there are no filing extensions in 2016!
- Analyze data on a monthly basis – 95% of your employees must be offered coverage every month in order to avoid non-compliance penalties.
- Re-evaluate your software solution – With 2015 done and over with, software vendors are streamlining their ACA solutions. Less expensive software packages may not provide the extensive form completion needed for filing.
- Re-evaluate your compliance threshold – 2015 allowed companies to offer coverage to only 70% of their employees. With the 95% threshold being enforced in 2016, it is important that your company review data and adjust as needed.
- Hire a professional – With steep penalties for incorrect information, it may be in your best interest to hire an ACA compliance specialist to identify errors and help with compliance problems.
Affordable Care Act compliance for 2016 does not have to be as mind-boggling as 2015; being prepared and having a strategy in place to tackle ACA can help avoid issues down the road. Partnering with a trusted, proven software vendor such as Integrity Data should also lessen stress around 2016 reporting!