What responsibilities does ACA place on HR departments?

HR departments are responsible for monitoring employee work hours, determining ACA full-time status, coordinating health coverage offers, and managing employee communications regarding coverage. ACA-Track provides tools to simplify these tasks and ensure compliance with federal ACA requirements.

How important is tracking actual hours worked for part-time employees under ACA?

Tracking actual hours is critical because ACA eligibility depends on average weekly hours worked. Without accurate tracking, employers risk penalties if employees qualify for Marketplace subsidies. ACA-Track automates hour tracking to ensure accurate eligibility assessments.

What are the deadlines for distributing and filing ACA forms?

Employers must provide Form 1095-C to employees by January 31 each year, and file Forms 1094-C and 1095-C with the IRS by March 31. ACA-Track handles form generation and electronic filing to meet these deadlines efficiently.

What role does FTE calculation play in ACA compliance?

FTE calculation determines if an employer is an ALE, which triggers ACA responsibilities. This calculation aggregates full-time employees and part-time equivalents. ACA-Track offers precise FTE tracking and reporting to support HR compliance efforts. Use our FTE Calculator for assistance.

How can ACA-Track support HR during an IRS ACA audit?

ACA-Track securely stores all compliance data and offers easy access to IRS forms and employee eligibility records. This organization simplifies audit responses and supports quick resolution of IRS inquiries or penalty notices.

ACA Compliance FAQs for HR Professionals

ACA Compliance FAQs for HR Professionals: Your Complete Guide with ACA-Track

The Affordable Care Act (ACA) has introduced complex compliance requirements for employers, especially those classified as Applicable Large Employers (ALEs). For HR professionals navigating the maze of ACA regulations, tracking employee hours, managing eligibility, and submitting accurate reports to the IRS can be overwhelming. That’s why many organizations rely on trusted ACA compliance solutions like ACA-Track to simplify and secure the process.

In this detailed blog post, we’ll cover frequently asked questions about ACA compliance from the perspective of HR professionals. We’ll also show how ACA-Track can empower your team with tools that streamline compliance tracking, reporting, and auditing.

Part 1: Understanding ACA Basics for Employers

What Does the ACA Mean for My Company?

Section 4980H of the Internal Revenue Code requires certain employers (ALEs) to offer health coverage to full-time employees that is both affordable and provides minimum value. If an ALE fails to do so, they risk making “employer shared responsibility payments” to the IRS if employees receive premium tax credits through the Health Insurance Marketplace.

How Do I Know if My Company Is an Applicable Large Employer (ALE)?

If your company has 50 or more full-time employees, including full-time equivalents (FTEs), you are considered an ALE. This is determined based on your workforce size during the preceding calendar year.

Full-time employee: Someone working an average of at least 30 hours per week or 130 hours per month.

FTE calculation: Combine hours of part-time employees (capped at 120 hours per employee), divide by 120 to get equivalent full-time employees, then add to actual full-time employees.

Why Track Part-Time and Variable Hour Employees?

Tracking hours worked by part-time and variable hour employees is crucial for:

Determining eligibility for health coverage.
Avoiding penalties related to failure to offer coverage.
Proving to the IRS that an employee worked less than 30 hours weekly on average, which means the employer wasn’t required to offer insurance.

Without proper documentation, employers risk penalties if an employee obtains coverage through the Marketplace and receives subsidies.

Which Departments Handle ACA Compliance?

ACA compliance requires collaboration across multiple departments:

HR: Employee data, benefits eligibility.
Payroll: Hours worked, compensation data.
Finance: Budgeting, penalty payments.
Benefits: Health plan offerings, waivers.

Usually, ultimate responsibility is assigned to a senior leader such as the Chief Financial Officer, Human Resources Director, or Benefits Manager.

Part 2: ACA Reporting Responsibilities and Deadlines

What Are the Reporting Requirements for ALEs?

ALEs must file:

Form 1094-C: Transmittal form to the IRS.
Form 1095-C: Individualized form to each employee detailing offers of coverage.

These forms inform the IRS whether coverage was offered and if the employer owes shared responsibility payments.

What Data Is Needed for ACA Reporting?

Accurate ACA reporting requires data from:

Payroll (hours, wages)
HR (employee status, hire/termination dates)
Benefits (coverage offers, waivers)
Timekeeping (actual hours worked for variable hour employees)

What Are the Key Deadlines?

January 31: Furnish Form 1095-C to employees (extensions have been granted some years).
March 31: File Form 1094-C and 1095-C with the IRS electronically (for employers with 250+ employees, electronic filing is mandatory).

Fully-Insured vs. Self-Insured Plans

Fully-insured: Employer pays premiums to insurer who assumes claims risk.
Self-insured: Employer assumes the risk and pays claims directly.

Self-insured ALEs must report additional coverage details on Form 1095-C (Part III) for enrolled employees and dependents.

Electronic Filing and Transmitter Control Code (TCC)

Employers with 250+ employees must file electronically and obtain a Transmitter Control Code (TCC) from the IRS, which requires application 45 days before filing and annual renewal. Data files must conform to IRS AIR (Affordable Care Act Information Returns) schema to be accepted.

Part 3: Penalties and Non-Compliance Risks

What Are the Penalties for Non-Compliance?

Penalties depend on the violation and timing:

Late filing/furnishing penalties range from $50 to $270 per return.
Shared responsibility penalties can be up to $2,000 per full-time employee (excluding first 30) if no coverage is offered.
Penalties of $3,000 per employee can apply if coverage is unaffordable or fails minimum value standards.

What Is an IRS 226-J Penalty Letter?

This letter notifies an employer of ACA non-compliance and penalties owed. It includes:

Penalty summary.
Employee Premium Tax Credit Listing.
Response form with deadlines.

What Should You Do if You Receive a 226-J?

Respond by the deadline (usually 30 days).
Review data and coverage offers.
Investigate possible errors or employee waivers.
Gather documentation supporting compliance.
Consider legal or ACA compliance service assistance.

Part 4: Why Choose ACA-Track for ACA Compliance?

Managing ACA compliance manually or across disparate systems can lead to errors, missed deadlines, and costly penalties. ACA-Track offers a proven, comprehensive compliance solution tailored for HR professionals and organizations of all sizes.

What ACA-Track Offers:

Collect: Employee hours worked from multiple sources — time clocks, payroll, mobile entries — covering full-time, part-time, variable-hour, and substitute employees.
Monitor: Eligibility thresholds, waivers, leaves, and alerts for compliance risks.
Report: Generate and electronically file IRS-compliant 1094-C and 1095-C forms.

Key Features:

User-friendly dashboard: Customize views, sort, filter, and group employee data for quick insights.
Snapshot summaries: Preserve historical data as it was during specific periods for audit readiness.
Flexible configuration: Adjust measurement, administrative, and stability periods; waiver codes; affordability percentages.
Security: SOC 2 Type 2 compliant cloud hosting, encrypted personal data, and secure HTTPS transfers.
Dedicated Client Success Advisor: Personalized support ensures your compliance journey is smooth and stress-free.

Integrations and Data Handling

ACA-Track seamlessly integrates with any payroll system, HRIS, or financial management software. This eliminates tedious manual data entry and reduces errors in compliance tracking and reporting.

Final Thoughts

ACA compliance is an ongoing responsibility that requires meticulous tracking, accurate reporting, and timely responses to IRS communications. For HR professionals, staying on top of these requirements can be challenging, especially when managing diverse employee populations and multiple data sources.

Partnering with a specialized, reliable platform like ACA-Track can reduce risks, save time, and give your team confidence that your organization meets ACA mandates — all while maintaining data security and audit readiness.

For more information or a demo of their ACA compliance services, visit ACA-Track.

If you have specific questions about your ACA obligations or want to learn more about how ACA-Track can support your business, feel free to ask!