3 lessons learned about ACA compliance from filing 2M 1095-Cs
Last year we wrote about what we learned from the 2016 ACA e-filing process, the first year employers had to report. It was tricky, error-prone, and buggy, but we got through it.
With another year gone and the ACA still intact, another round of reporting is upon us, which means many employers are once again scrambling to prepare. With more than 2 million ACA forms filed, we’ve learned a thing or two about ACA compliance.
So, to make sure your 2017 reporting is successful, we’ve boiled our experience down to three core lessons and tips. Here’s how to prepare for a smooth filing process this year and beyond.
1. Source data is critical to success
The success of your ACA filing largely depends on the accuracy of your source data. A seemingly innocuous typo or transposed number in a single employee file could sabotage your entire report.
In fact, one of the most common reporting errors we’ve seen is Social Security Numbers that are off by one number. It seems innocent enough, but if the SSN you report doesn’t match the IRS database, the forms are flagged as incorrect. This goes for your employees and for their spouses and dependents too. Luckily, this situation can be easily avoided by having all employees regularly validate their (and their dependents’) personal information.
Errors are also common within source data about offers of coverage. Employer records should show specific dates of enrollment in a healthcare plan for each employee as well as whether (and when) the employee accepted or waived ACA coverage. In case of termination, the records should be updated to indicate when coverage was revoked so there’s a clear paper trail.
If source data is wrong or missing from your IRS filing, an organization could spend hours looking back to locate the correct information. More work in maintaining these records up front will help in the long run.
However, to err is human, and mistakes can happen. Before submitting, review your data and forms closely. If you spot something that needs to be updated, be sure to change it before filing. This is where beginning the filing process early can help. The ACA requires you to process a ton of information across many forms, and the deadlines are closely packed together, so the more time you have to complete, crosscheck, and correct your forms, the better.
2. The calendar is king
Even though the deadline to submit ACA data was extended to March 2, there’s not much time for employers to prepare and file successfully. In our experience, companies that wait until the last minute to file – or treat filing as a one-time event instead of a year-long initiative – struggle to comply. Employer e-filing isn’t like individual filing; there’s a ton of data to collect, process, and review throughout the year, not just in January or February.
Hold yourself accountable throughout the year. If that means setting calendar reminders with important dates and hints to check back on the accuracy of the data, then do it. Government agencies like the IRS won’t send reminders, even though they make public announcements, so the responsibility to be timely rests on the submitting organizations’ metaphorical shoulders.
In addition to the multiple ACA-related deadlines for 1095-C distribution and e-filing, organizations must adhere to other deadlines in the same timeframe, including EEO-1 reporting. Keeping track of all the moving pieces is challenging, which is why organizations should have a strong foundation to work off of. Otherwise, fines and penalties may make a dent in your bottom line.
3. Compliance isn’t a one-time event
Just as keeping a schedule helps move a plan forward, drafting a roadmap for each aspect of reporting and compliance can ensure success.
Unexpected questions may crop up: What do we need to report on? What indicator codes should be populated?
Knowing where to find the answers will give you a leg up on the process. For example, understand your affordability safe harbors and have all the accurate pieces of data at your disposal before completing the forms.
Our customers that update and upload data every week, verify information constantly, and review forms thoroughly before submitting to the IRS are more efficient than those that give themselves only a few weeks to do a year’s worth of work. Instead of spending time at the last minute on the phone with insurance carriers to confirm details, manage the plan in smaller portions throughout the year.
Depending on the size of your organization, there could be hundreds of forms to submit, which is no small undertaking. Having a plan in place can keep you organized and less frantic as the deadlines approach.
ACA e-filing done right
This is a lot to manage, so help yourself out whenever possible. Finding a partner that can compile, confirm, process, and submit the data can save hassle, time, and money. We’ve filed more than 2 million ACA forms and understand the commitment it takes to prepare for and submit correctly. If you’re just now starting the ACA reporting process for 2017, give us a call and we’ll introduce you to some tools that can help.
We hate to break it to you, but even though 2017 reporting isn’t over, you should already be preparing for 2018 reporting. Despite not knowing what ACA reporting will look like next year, you don’t want to be caught off-guard.
Regularly confirming the accuracy of your source data, keeping a schedule, and establishing an ongoing compliance plan are the real keys to success.