ACA Strategies to Meet the New Legislative Requirements
Compliance with the Affordable Care Act (ACA) and ACA reporting can be overwhelming for employers. Having a plan in place to monitor these changes, manage the varying complexities, and meet strict deadlines is key to ensure your business is compliant with all employer reporting requirements related to health care reform.
Does your ACA approach comply?
The Affordable Care Act (ACA) continues to evolve and change regarding compliance requirements. The enactment of the Paperwork Burden Reduction Act (PBRA) and the Employer Reporting Improvement Act (ERIA) have introduced changes that may appear to streamline ACA compliance processes but, in reality, have increased complexity for applicable large employers (ALEs). So, what does this mean to you and the impact on your organization?
Paperwork Burden Reduction Act (PBRA)
While the Paperwork Burden Reduction Act only requires employers to furnish Forms 1095-C to employees by request, there are additional key considerations employers will need to consider. Employers that choose to take advantage of this option must ensure clear, visible, and accessible notice is provided to employees to request a copy of their Form 1095-C. Employers that choose to furnish Form 1095-C by request only will not only need to make sure they have the tools in place to manually track employee form requests but will also need to ensure the employee request deadline is met to avoid potential penalties. Additionally, employers will need to furnish Form 1095-C in the employees preferred method, paper or electronically. In some cases, you're only going to have 30 days to furnish the forms, or you could face an IRS penalty.
- How will your process provide clear, visible, and accessible notice to employees regarding electronic delivery?
- What process does your organization have in place to track and produce forms on an ad hoc basis to meet each individual furnishing deadline?
Employer Reporting Improvement Act (ERIA)
One of the key considerations of the Employer Reporting Improvement Act is electronic delivery of Forms 1095-C. Employers must also make sure they've received employee consent for electronic delivery. Should an employee revoke their consent for electronic delivery of their Form 1095-C, employers will need to make sure they have a process in place to accommodate such requests. The Employer Reporting Improvement Act also adds a 6-year statute of limitation to Employer Shared Responsibility Penalties. Employers will need to ensure employee level data regarding eligibility, affordability, and form transmissions is retained for a minimum of six years after filing.
- What process does your organization use to document electronic delivery consent and requests to revoke electronical delivery from employees?
- Does your organization have a process, expertise, or vendor to retain employee level data required to respond to penalty notices received up to 6 years after filing?
Federal vs state
Employers need to keep in mind the changes in the law are related to only federal requirements. The state health coverage furnishing requirements for California, New Jersey, Rhode Island, and Washington, DC (District of Columbia) have not changed. These states still require furnishing of Form 1095-C to all applicable employees.
- What process does your organization use to ensure forms 1095-C are furnished to employees in these states when you are no longer providing forms 1095-C to your entire population?
- How are you tracking your employees' address changes throughout the year to know when they may be a resident, even for part of the year, of one of these states?
ACA complexity is real
While these legislative changes are aimed to reduce the burden on employers, there are additional layers of complexity that have been added and can impact your organization. Penalties can be assessed if employers do not furnish forms 1095-C upon request based on the IRS deadline. Take action now to avoid potential penalties.
- How does your ACA strategy factor in the new legislative updates?
- Does your organization have an ACA partner to help with the complexities of the ACA?
ACA compliance and reporting can be overwhelming for employers. Having a plan in place to monitor these changes, manage the varying complexities, and meet strict deadlines is key to ensure your business is compliant with all ACA employer reporting requirements related to health care reform.
Our ACA penalty calculator can help you learn how to proactively avoid penalties.
