The rollout of the Affordable Care Act (ACA) has continued in 2015 as the IRS released reporting regulations for employers, requiring them to collect a massive amount of data on their workforce; moving into 2016, organizations will be required to develop processes for reporting to the IRS. These ACA compliance developments have motivated many companies to consider options for reporting vendors, but the wide array of providers can be overwhelming. Part of your best practices approach to finding an ACA reporting vendor should be asking the right questions, so here are a few to get you started.
Who is responsible for managing different data? Your ACA reporting solution will handle a significant amount of data relating to your employees, which must be tracked and reported as necessary for compliance. With this question, you want to determine who will be managing this information between your organization and the vendor you ultimately select – and even possibly your health insurance broker. It’s important to know these details so there aren’t any gaps in reporting that can result in penalties for non-compliance.
How is data integrated to avoid duplicate entries? With this question, you want to establish whether the solution relies upon a single database environment or multiple. When you’re dealing with numerous sources of data, there’s more likelihood for duplication.
What factors impact cost? Pricing will always be a factor in your ACA reporting solution, so find out how you’ll be charged. Some cloud-based systems will charge you on a monthly basis, but only for those services you use.
Does your solution include IRS forms regarding ACA compliance? In regards to ACA reporting compliance, Internal Revenue Code Section 6055 states that employers must file certain informational returns with the IRS in 2016 based on coverages in place during 2015. It’s essential that your ACA reporting vendor can produce these forms.
Is your company an IRS-authorized e-file provider? The IRS accepts a number of tax forms via electronic submission through Authorized E-File Providers, including those required under IRC Section 6055. For ease of filing, make sure your ACA reporting solution enables you to file the necessary forms electronically.
Is your system based on a monthly or look-back measurement period? Under the ACA, Applicable Large Employers (ALEs) must offer health insurance coverage to full time employees or they face penalties for non-compliance. Organizations will typically determine full versus part time status by calculating the individual’s hours of service, which is allowable under two different methods:
When researching ACA reporting vendors, it’s important that you know which method their solution will accommodate. One or the other will be suitable for your existing measurement methods – or which calculation you intend to implement for ACA compliance purposes.
How does your system track measurement, administrative and stability periods for new hires? Tracking these time periods is essential under ACA regulation because they determine a new hire’s eligibility for health insurance coverage – i.e., is the new hire working 30 or more hours per week or 130 hours per month? An ACA reporting solution must carefully record these time periods for every employee, including new hires; therefore, it’s essential that you understand the functions behind the tracking features.
Can your system utilize the measurement period for variable workers? Variable employees, such as temporary workers and seasonal hires, are also measured for FT/PT hourly purposes to establish eligibility for health insurance coverage. An ACA reporting service must be able to track these time periods in order to maintain compliance.
How does your solution classify interns? Interns can be considered either variable or seasonal employees under the ACA, a definition which depends upon the length of the internship and whether the employment is based upon a specific time of year. It’s important that you discuss these options with your ACA vendor so you can prepare for taking on paid interns; unpaid interns are not subject to ACA requirements.
These questions should help guide you as you start researching ACA reporting vendors, but you must also consider the specific needs of your organization, workflows and business objectives. Paypro offers integrated workforce management tools that provide complete automation and high-quality information for driving cost-effective labor decisions and minimizing ACA compliance risk with a built-in ACA module that allows you to proactively manage ACA compliance strategy across your entire workforce. Please watch this ACA reporting video or contact us to find out more.