How does ACA compliance affect HR teams?

ACA compliance requires HR teams to track employee hours, determine eligibility for healthcare coverage, and file necessary forms with the IRS. Failing to comply with ACA regulations can result in significant penalties. ACA-Track automates the tracking, reporting, and error correction processes to help HR teams stay compliant with ease.

How does ACA-Track help HR teams track employee hours?

ACA-Track automates the collection of employee hours, including part-time and variable-hour employees, ensuring HR teams can accurately track hours worked. It integrates with payroll and timekeeping systems, making it easy to monitor hours and assess eligibility for ACA coverage.

What forms must HR teams file for ACA compliance?

HR teams must file IRS forms 1094-C and 1095-C to report on health coverage offerings and employee eligibility. ACA-Track generates these forms and handles e-filing, ensuring HR teams meet reporting deadlines and avoid penalties.

What is an FTE, and how does ACA-Track help HR teams calculate it?

An FTE (Full-Time Equivalent) is used to determine whether a business is an Applicable Large Employer (ALE) and must comply with ACA regulations. ACA-Track automatically calculates FTEs by tracking employee hours and categorizing them as full-time or part-time. HR teams can easily view and manage FTE data to ensure compliance with ACA's 50-employee threshold.

How does ACA-Track assist with ACA error corrections and IRS audits?

ACA-Track identifies and corrects errors in reporting before submission to the IRS, minimizing the risk of penalties. In the event of an IRS audit, ACA-Track stores all relevant ACA data in a secure cloud-based platform, making it easy to retrieve and review compliance records for audit purposes.

ACA Compliance Made Easy for HR Teams

ACA Compliance 101 for HR Teams: A Comprehensive Guide to Understanding ACA Regulations and Reporting Requirements

The Affordable Care Act (ACA) has significantly transformed how employers provide healthcare coverage, introducing new responsibilities and regulations for businesses across the United States. Navigating the complexities of ACA compliance can be daunting for HR teams, especially when considering the vast amount of data involved, the numerous forms required, and the potential penalties for non-compliance. Fortunately, solutions like ACA-Track can simplify this process and provide peace of mind.

In this blog post, we’ll break down the essential components of ACA compliance for HR teams, highlighting the key regulations, reporting requirements, and best practices for managing this crucial responsibility. Whether you’re a small business or a large employer, understanding ACA compliance is crucial for avoiding penalties and ensuring your employees have access to the healthcare coverage they are entitled to.

What is ACA Compliance?

The Affordable Care Act (ACA), signed into law in 2010, mandates that applicable large employers (ALEs) provide affordable health insurance coverage to their full-time employees (and their dependents) or face potential penalties. The ACA also introduced a set of reporting requirements for employers, including submitting forms to the IRS and providing employees with tax-related documents. For HR teams, this means tracking employee work hours, monitoring health insurance coverage, and ensuring compliance with the ACA’s detailed reporting rules.

Key ACA Requirements for Employers:

Employer Shared Responsibility Payment: If an ALE does not offer affordable health insurance or offers coverage that does not meet minimum value, it may be subject to a shared responsibility payment. The penalty for non-compliance can be substantial, with fines assessed on a per-employee basis.
Reporting Requirements: Employers must submit Form 1094-C and 1095-C to the IRS to report offers of health insurance coverage to employees. Additionally, employees must receive their own 1095-C forms for tax filing purposes.
Tracking Hours Worked: To determine whether an employee is full-time (and thus eligible for health coverage), employers must track the hours worked by both full-time and variable-hour employees. This is critical for avoiding penalties when employees qualify for subsidies through the health insurance marketplace.

The Role of HR in ACA Compliance

HR teams play a critical role in managing ACA compliance by ensuring that all employee data is accurately tracked, stored, and reported. Since ACA compliance touches on payroll, benefits, and employee status, HR teams must collaborate with payroll, finance, and benefits departments to gather the necessary data.

Here are the primary responsibilities of HR in ACA compliance:

Tracking Employee Status: HR teams must monitor full-time and part-time employees, including those with variable hours, to determine their eligibility for health coverage.
Ensuring Health Coverage Offers: For full-time employees, HR must ensure that they are offered health insurance that meets ACA standards for affordability and coverage.
Collecting Hours Worked: HR is responsible for tracking the hours worked by employees, particularly those who may be considered part-time or variable-hour employees. This data is essential for ACA reporting.
Reporting to the IRS: HR teams must ensure that the proper forms (1094-C, 1095-C) are filed with the IRS by the appropriate deadlines, and that employees receive their individual forms by the required date.

ACA-Track: Simplifying ACA Compliance for HR Teams

ACA-Track offers a streamlined and automated solution for managing ACA compliance. With powerful features designed specifically for HR teams, ACA-Track helps eliminate the complexities of ACA tracking and reporting. Let’s dive into how ACA-Track can help HR departments stay compliant with ease:

Key Features of ACA-Track:

ACA 1095-C Monthly Line Code Audits: ACA-Track ensures that all 1095-C forms are properly filled out with the correct line codes, helping you avoid IRS penalties for incorrect filings.
Variable Hour Tracking: ACA-Track tracks hours worked by employees, including those with fluctuating hours, ensuring that you can determine eligibility and prevent penalties for failing to offer coverage to employees who qualify for it.
Federal and State Reporting (Forms 1094-C & 1095-C): ACA-Track streamlines the reporting process by automatically generating the required IRS forms (1094-C, 1095-C) and submitting them electronically.
Error Resolution: In the event of ACA reporting errors, ACA-Track helps identify and fix discrepancies before they become problematic, saving your organization from costly penalties.
Dedicated Client Success Advisor: ACA-Track provides support every step of the way. With a dedicated Client Success Advisor, your team can rest assured that all ACA compliance obligations are met on time and without hassle.
Data Integration: ACA-Track integrates seamlessly with payroll systems, HRIS, and financial management systems, allowing for accurate data collection and reporting across all employee types.
Cloud-Based Security: ACA-Track is designed with data security in mind. Its cloud-based platform is SAS 70 certified, SOC 2 Type 2 compliant, and employs encryption for sensitive employee data to prevent unauthorized access.
Customizable Dashboard: The ACA-Track platform allows HR teams to configure their dashboard and user interface to see the most important data at a glance, streamlining the compliance process.

How ACA-Track Makes ACA Compliance Easy:

ACA-Track’s user-friendly interface and customizable features make it easy for HR teams to monitor employee eligibility, track work hours, and file the necessary forms with the IRS. With the ability to collect data from multiple systems (timekeeping, payroll, HRIS), ACA-Track ensures that your organization can stay on top of compliance without having to juggle disparate data sources.

Furthermore, ACA-Track’s unique snapshot approach maintains employee ACA data over time, so you can easily track changes in employee status and coverage eligibility. This feature is especially valuable in the event of an IRS audit or state healthcare exchange inquiry, as it allows for quick access to historical records.

Understanding ACA Reporting: Forms 1094-C and 1095-C

As an ALE, your company must file two key forms with the IRS to report on your health insurance coverage offerings:

Form 1094-C: This is the transmittal form used to transmit the 1095-C forms to the IRS. It includes summary information about your company’s health coverage offerings and is filed by March 31 each year.
Form 1095-C: This form provides individual information about the health coverage offered to each employee. Each full-time employee must receive a copy of Form 1095-C by January 31 of the following year.

These forms play a crucial role in determining whether your organization owes any shared responsibility payments and whether your employees are eligible for health insurance marketplace subsidies.

Non-Compliance Penalties: What Happens If You Don’t Comply?

The IRS imposes significant penalties for employers who fail to comply with ACA reporting and coverage requirements. For instance, penalties can reach up to $270 per form filed incorrectly or late, with potential fines totaling over $1 million for large employers. Additionally, if you fail to provide affordable coverage or meet minimum value standards, you may be subject to an Employer Shared Responsibility Payment, which can amount to $2,000 per full-time employee.

To avoid these penalties, it’s essential to stay organized, track employee hours, and file the necessary forms on time. ACA-Track can help you avoid these costly mistakes by providing accurate, timely reporting.

Final Thoughts: Make ACA Compliance Easy with ACA-Track

Managing ACA compliance can feel overwhelming, but with the right tools and support, HR teams can easily meet the requirements without unnecessary stress. ACA-Track offers a comprehensive, data-driven solution that simplifies the tracking, reporting, and error resolution process, making ACA compliance easier than ever. With features like automated 1095-C audits, integration with payroll systems, and secure data storage, ACA-Track ensures that your organization remains compliant and avoids costly penalties.

By leveraging ACA-Track’s powerful platform, HR teams can focus on what they do best – supporting employees and growing the business – while leaving the complexities of ACA compliance in the hands of an expert solution.

For more information on how ACA-Track can help your organization streamline ACA compliance, visit ACA-Track today.