Complex measurement issues. Filing Deadlines. IRS penalty letters and audits.
What do all of these things have in common? You guessed it — ACA reporting!
Millions of organizations are staggering under the reporting requirements imposed by the government around the Affordable Care Act. Several software packages claim to simplify and streamline reporting, the reality is that these platforms are only as good as the teams that are supporting them. It takes support — a proactive workflow and an internal audit process to work through the challenges confidently and ensure that your business complies with all healthcare mandates. Don’t put yourself at risk for errors, complications for employees or major IRS fines — see how taking an active part in your annual ACA reporting can alleviate these concerns and bring peace back to your human resources department staff.
Benefits of Integrated Technology
Whether it’s monitoring lookback reports, generating 1095-C forms, or filing electronically with the IRS – all of these critical processes utilize data found in most BenAdmin platforms. Coverage history, eligibility changes, and demographic data must all flow together in order to generate accurate and timely IRS filings. When ACA reporting is integrated with your benefits administration system, you minimize the number of variables involved in the process and in most cases, you save time and resources in the process. Moreover, integrated ACA technology can help mitigate — but not eliminate — the possibility of costly fines that could adversely impact your organization’s bottom line. However, even for clients who are currently utilizing ACA reporting via integrated technology, there are still common pitfalls that could derail your efforts at multiple stages throughout the ACA process.
Common Pitfalls of ACA Reporting
How can you reduce your possibility of errors before you submit your annual reporting? Having an ACA reporting system integrated with your benefits administration platform is definitely a step in the right direction. In addition, your ACA reporting partner should be an active member of your strategy team, helping you identify issues and creating a plan to alleviate the concerns before they become a problem.
Steering clear of the challenges below will save time and effort for your Human Resources Department — and limit frustration for your staff members. From inconsistencies in your data to a lack of complexity in your reporting package, here are some key situations that can lead to problems down the road.
- Failure to properly record transactional data throughout the year. Since ACA reporting is based on the timeframe in which a change occurred, it’s crucial that you capture the timeline around changes to employee status and their classification for benefits in a timely manner and act on it accordingly.
- Limiting your review of your employee benefits data to an end of year inspection. Failing to offer healthcare coverage to newly eligible employees in a timely manner triggers fines that increase until addressed. Further, an annual review in December simply isn’t going to give you the insight needed into the full year’s worth of problems — nor uncover the real story behind the data. It will likely uncover questions that will cause your team a significant amount of additional work.
- Inconsistent lookback reporting that fails to identify and execute eligibility changes on a timely basis. A sporadic approach to eligibility monitoring is a recipe for costly fines and penalties. Set a review cadence with your vendor and ensure both stakeholders and committed to the timing.
- Manually mapping IRS codes is a big problem! IRS code lookup and entry should be fully automated in order to avoid inaccuracies and potential fines around your compliance.
- ACA reporting that relies on information from multiple platforms and data that isn’t ‘normalized’ can generate inaccurate reports. Failure to synchronize data effectively opens your organization to be hit with fines. Look for a proactive reporting vendor that provides a single source solution and is able to stand behind their reporting platform with exceptional service throughout the reporting year.
- Delays in mailing or filing your ACA reports can ultimately lead to major problems. Resolving outstanding issues is best accomplished throughout the year.
- Failing to keep up with IRS error resolution. Most employers file their ACA reports timely. But not all are diligent in resolving the errors the IRS kick out. Are you staying on top of IRS error resolution? Corrections should be made before the current report year expires.
- Missing the reports needed to respond to penalty notices in a timely manner. Over the past year, the IRS has been actively sending penalty notices based on employer’s reports for 2016 and 2017. The amount of
the penaltiesfor most has been staggering! Responding to a penalty letter requires access to the reports in question and methods utilized to generate the information – and must be timely too.
- Structural changes within your organization may require you to make changes to future filings. This includes everything from adding new job classes, updating your locations, changed EINs — anything that effects the transactional data in your ACA reports.
ACA reporting should not be an annual event. Mitigating IRS fines requires proactive efforts throughout the year.
How Proactive Support Reduces Your Reporting Risk
Working through these ACA eligibility and reporting issues without the expertise and support of a proactive vendor can be extremely challenging. When you work with a technology partner who offers an integrated system blended with strategic, proactive support, you’re able to mitigate the risk of filing errors. Employers should never compromise on service when assessing their current ACA vendor’s strategy. Your organization’s bottom line could be at risk, and the stakes have never been higher. Ensure you are receiving the level of proactive support required to increase your chance of a stress-free filing season.
What is Considered Proactive Support?
A technology partner with a dedicated team for ACA reporting that is knowledgeable of the ACA reporting requirements is a must. Very few human resource teams have the capacity to devote staff member time to year-round reporting and error resolution, making this relationship with your reporting partner a crucial one for your business success. You need your partner to proactively look for potential pitfalls in your ACA eligibility monitoring and reporting, and make actionable recommendations. This could include everything from spotting issues with your internal processes to identifying data entry captures that are unreliable.
Working with an ACA reporting expert provides you with:
- Education and training for your team
- Proactive services
- Reduced frustration for your team
- Increased efficiency in eligibility management and processing ACA reports
- Heightened confidence from your human resources executives and leadership that the risk of penalties and audits will be reduced.
While it’s obvious that the technology needs to be up to par in order to be successful with your ACA reporting, lack of process and inconsistencies in your data can sink even the most sophisticated software tools. You need the proactive support of a decided ACA reporting partner in order to stay on track with your compliance reporting strategies. Be aware of these common red flags that can appear before, during or after your 2019 ACA reporting period by downloading our complimentary guide.
You can also request a free demo or more information on the Selerix ACA platform, including the proactive level of service that your organization deserves — and to sidestep the IRS penalties that could otherwise be looming in your future.