ACA reporting is still happening - time to get data in order
After all the ups and downs faced by the Affordable Care Act (ACA), it’s likely your health care data took a back seat to other concerns for the first eight months of the year.
But now, as we enter the ninth month, it’s time to swallow the fact that the ACA isn’t going anywhere. And all that data? It needs to be in pristine condition for submission to the IRS by the end of March if you want to escape penalties that, for the first time, the IRS is actually preparing to collect.
If you, like many American companies, have been slacking on your data upkeep, here’s what you should be doing to finish out the year strong.
The ACA isn’t going away
The ACA has given employers—and the IRS—plenty of time to adapt to the new regulations. For the past couple of years, filing has either been a practice run, enacted only on a good faith effort, or operated on extended deadlines. After so many loose enforcements, as well as repeated promises of repeal and replace, ACA fines may not seem like a pressing matter. Unfortunately, this looks like the first year they truly will be.
For the first time since the ACA’s implementation, the IRS has given out its schema for filing ahead of time, taken down its ACA Information Returns (AIR) system for maintenance, and is set to collect on $228 billion in penalties for the 2017 reporting season. Time has run out on repeal and replace for 2017—the next cycle has already begun.
Wait too long and you could rush to submit with bad information, miss deadlines, and worst of all, get hit with the eventual fines. Now’s the time to catch up with compliance.
ACA data under review
Early September may not seem like a particularly special time for the ACA, but that’s exactly why it’s the best time to take a good hard look at the data you’ll soon be expected to submit. There’s no stress of deadlines, no open enrollment to deal with, and a good portion of your data—about 75 percent of the year—to look at.
Even with the best payroll and ACA solutions in the world, inaccurate data can mean noncompliance. Take the time to double check that all your employees’ payroll information—name, address, employment status, and other personal information—is correct and in the system. If someone was fired in June, make sure this is accurately reflected in your HR and payroll data. Otherwise, the government may come asking why you didn’t offer them health care in the second half of the year.
The second batch of information you should review is offers of health care coverage. This involves checking each employee’s ACA employment status (ACA full-time or part-time) for the past year. Many companies’ year-long tracking periods end just before their open enrollment, which typically happens in the fall. If this is the case for you, pay especially close attention to who achieved ACA full-time status over the past few months, and ensure they receive an offer of health coverage.
Once these two categories have been reviewed, you’ll be in a great starting place when it comes time to fill out your 1094- and 1095-Cs. Just make sure to do a 30-minute monthly checkup to update any major changes to employer information.
Procrastination could mean ACA penalties
Data review may seem like a tedious and unnecessary part of the compliance journey, but everyone makes mistakes. And with so much uncertainty around the ACA’s future, many companies weren’t vigilantly checking their data for the past few months. There are likely to be mistakes—some of them fine-inducing—hidden in your company data.
Sure, you could take on all of this once ACA season hits full force, but there’s already enough work to do. You don’t want to have to retroactively edit all of your data in the month between the end of the year and the first ACA deadline of January 31.
As the ACA continues to roll out more of its pieces, rather than roll them back, mistakes will no longer be tolerated as an acceptable excuse for noncompliance. Make sure you get ahead of the game, and escape penalties, by doing a preemptive check of your payroll and health care data. You’ll thank yourself later.