Overview

Meeting the Affordable Care Act’s reporting requirements is no easy task, and there are plenty of misconceptions surrounding those requirements. Here are seven myths of ACA reporting to help advisers and their employer clients comply with the law and avoid penalties.

1) I’ve already purchased ACA Reporting software. I’m using it to track my variable hour employees.

Variable hour tracking and ACA reporting are not the same. The data required for variable hour tracking is totally different from the data required for ACA reporting.

2) I had less than 100 full-time equivalent employees during 2014 so I don’t have to report for 2015.

All applicable large employers (employers who employed an average of at least 50 full-time equivalent employees during 2014) must report, even if the employer qualifies for transition relief.

3) I employed more than 50 full-time equivalent employees during 2014 but I don’t offer any employee medical benefits.

All applicable large employers who are subject to the ACA employer shared responsibility requirements must report, even if the employer does not offer benefits or does not offer minimum value and affordable benefits.

4) My payroll vendor has all of the required information.

Some payroll vendors may have most of the information, but it is unusual for payroll vendors to know:

  • When a change in status occurs that may cause a reporting code change.
  • The date an employee is eligible for benefits. Not when the employee starts contributing, but when the employee was offered benefits.
  • When an employee’s benefit effective date begins and ends. Again, not just when the contributions begin and end.
  • If an employee waives benefits.
  • Whether the employee is enrolled in a self-insured plan.
  • If the employee has enrolled any dependents in the plan.
  • The lowest cost of the employee only medical plan offered to the employee.

5) I can just read the instructions and figure out how to complete the forms.

The instructions are 14 pages long and are written for tax and benefit experts. In addition, the IRS has already released an additional 14 pages of clarifying questions and answers, with more to come. This is complicated information. In addition, do you have the staff to either data enter all of the information on the forms or to do the programming to map your data to the forms?

6) I can wait and decide later this year how I’m going to meet the reporting requirements.

Two cautions:

  1. Data must be reported for each month of the 2015 calendar year. If you don’t have accurate historical records of all changes you will not be able to do accurate monthly reporting.
  2. Many vendors are increasing their implementation fees to address compression issues with last-minute decisions and trying to recreate historical data.

7) There aren’t going to be any fines until next year.

There may be some relief from fines for employers submitting incomplete forms or forms with minor inaccuracies, however, the IRS has made it clear that there is no relief for employers that cannot show a good faith effort to comply to the extent possible or who fail to timely file or furnish a statement to employees.

Contact us today. We have tools to automate this entire process and generate all the forms for you. If your self-insured you have additional requirements that we can automate as well.