How can payroll providers help businesses with ACA compliance?

Payroll providers play a key role in ACA compliance by tracking employee hours, monitoring eligibility, and generating required reports. ACA-Track automates these processes, ensuring businesses meet ACA requirements without manual errors and reducing the risk of penalties.

What are the key features of ACA-Track for payroll providers?

ACA-Track provides payroll providers with powerful tools such as customizable dashboards, error detection, automatic generation of 1094-C and 1095-C forms, and secure e-filing with the IRS. It simplifies compliance by automating the tracking of employee hours, eligibility monitoring, and reporting, making it easy for payroll providers to manage ACA compliance for their clients.

How does ACA-Track handle tracking part-time and variable-hour employees?

ACA-Track integrates with payroll and timekeeping systems to automatically track the hours worked by part-time and variable-hour employees, which is crucial for determining ACA eligibility. The platform provides alerts when an employee reaches the ACA full-time equivalent (FTE) threshold, ensuring compliance with ACA reporting requirements.

What are the consequences of not complying with ACA regulations?

Non-compliance with ACA regulations can result in significant penalties, including fines for incorrect reporting and failure to offer health coverage to eligible employees. Payroll providers can help businesses avoid these penalties by ensuring accurate tracking, eligibility monitoring, and timely filing of ACA reports using ACA-Track's automation tools.

How does ACA-Track help payroll providers fix ACA reporting errors?

ACA-Track performs monthly audits to identify errors in reporting, helping payroll providers fix them before filing with the IRS. If an audit occurs, ACA-Track stores all ACA compliance data in one secure location, allowing for easy retrieval and quick resolution of errors, thus minimizing the risk of penalties.

ACA Compliance: The Opportunity for Payroll Providers

In today’s complex regulatory environment, managing the Affordable Care Act (ACA) compliance is a significant challenge for businesses, particularly those who employ 50 or more full-time employees, or Applicable Large Employers (ALEs). This is where payroll providers can step in and deliver essential solutions that ensure compliance, streamline reporting processes, and prevent costly penalties. One such solution is ACA-Track, a comprehensive tool designed to help businesses stay on top of their ACA obligations with ease.

In this blog post, we’ll explore the intricacies of ACA compliance, the role payroll providers play in simplifying it, and how ACA-Track can be an invaluable tool for both businesses and their clients.

Understanding ACA Compliance: A Brief Overview

The Affordable Care Act (ACA), enacted in 2010, brought sweeping changes to the healthcare landscape in the U.S., requiring large employers to offer affordable health insurance to full-time employees or face penalties. The core provisions impacting employers include:

Employer Shared Responsibility: ALEs must offer health insurance that is affordable and provides minimum value to full-time employees and their dependents.
Reporting Requirements: Employers must submit detailed reports to the IRS to demonstrate compliance with ACA regulations. This includes Form 1094-C and Form 1095-C, which provide crucial information about the insurance coverage offered to employees.
Tracking Employee Hours: Employers must accurately track the hours worked by part-time and variable hour employees to determine eligibility for health insurance coverage.

For businesses, this means keeping track of complex employee data, reporting on that data to the IRS, and maintaining compliance with ACA rules to avoid penalties.

The Role of Payroll Providers in ACA Compliance

Payroll providers play a critical role in helping businesses navigate ACA compliance. The data needed for compliance often spans multiple departments—payroll, HR, benefits, and finance. As such, payroll providers are uniquely positioned to assist in collecting, monitoring, and reporting the necessary data. This is especially crucial for businesses dealing with large numbers of employees or fluctuating workforces, such as those with many part-time, variable hour, or seasonal workers.

Here’s how payroll providers can assist with ACA compliance:

1. Tracking Employee Hours

Accurate tracking of employee hours is essential to determining eligibility for health insurance under the ACA. ACA-Track helps employers track hours worked by all types of employees, from full-time to variable hour employees. This tool integrates with various payroll systems, allowing businesses to track employee data across time-keeping systems, manual timesheets, automated clocks, and mobile device entries.

2. Monitoring Employee Eligibility

Eligibility monitoring is a key part of ACA compliance. Payroll providers can help ensure that eligibility thresholds are being met by tracking employee hours across set periods. ACA-Track offers features like advance alerts when an employee exceeds eligibility thresholds, ensuring that employers don’t miss critical compliance milestones.

3. Simplifying ACA Reporting

ACA reporting involves generating Forms 1094-C and 1095-C, which are submitted to the IRS and provided to employees. The data required for these forms spans various departments, including payroll, benefits, and HR. Payroll providers like ACA-Track offer streamlined solutions that simplify ACA reporting by consolidating all the necessary data into one system, making electronic filing with the IRS straightforward.

ACA-Track not only simplifies the process of generating these forms but also provides monthly line code audits to ensure the accuracy of reporting. This means that businesses can file their ACA forms with confidence, knowing that errors have been caught before they are submitted to the IRS.

4. Fixing ACA Reporting Errors

Errors in ACA reporting can lead to costly penalties. Payroll providers who offer ACA compliance services, like ACA-Track, can help businesses identify and fix errors before they become a problem. By performing ongoing audits and data verification, payroll providers ensure that businesses are compliant with ACA regulations and avoid costly fines.

5. Handling IRS Submissions

Filing ACA reports with the IRS is a critical aspect of compliance. ACA-Track allows businesses to file their ACA reports electronically, directly with the IRS, and tracks submission statuses. This ensures that deadlines are met and that businesses are up-to-date with their filings, reducing the risk of penalties.

Features of ACA-Track: A Comprehensive Solution for ACA Compliance

Customizable Dashboard and User Interface

One of the standout features of ACA-Track is its user-friendly, customizable interface. Payroll providers can tailor the dashboard to display the most relevant data, making it easier to monitor employee hours, track eligibility, and ensure compliance. With features like sorting, filtering, and grouping, the software allows for greater efficiency and better decision-making.

Snapshot Summary

ACA-Track offers a unique snapshot summary feature that keeps a historical record of employee data over time, including hours worked, salary records, and insurance status. This functionality ensures that payroll providers and employers have access to accurate data when needed, particularly in the event of an IRS audit.

Flexibility and Configuration

The platform provides flexible configuration options, allowing payroll providers to adjust measurement, administrative, and stability periods as necessary. Additionally, it can track varying hours worked weekly, monthly, and even calculate affordability percentages, ensuring that all requirements are met.

Data-Driven Insights

ACA-Track offers powerful data management tools that allow payroll providers to group, sort, filter, and analyze data easily. With color-coded warnings for errors and unusual data, the platform helps payroll providers identify and address compliance issues quickly.

Security

The security of employee data is a top priority for ACA-Track. The cloud-based data center is SAS 70 and SSAE 16 certified, ensuring the highest level of data security. Additionally, all personal identifying data is encrypted, and all data transfers are conducted through secure HTTPS protocols, offering peace of mind to employers.

The ACA Compliance Reporting Process

The ACA requires employers to file specific reports with the IRS and provide forms to their employees. Employers must submit Form 1094-C and Form 1095-C to the IRS by the end of March each year. These forms provide the IRS with information on whether the employer offered health insurance coverage to full-time employees and their dependents.

Employers must also provide a Form 1095-C to each employee by January 31, detailing the health insurance coverage provided to them. It’s crucial for payroll providers to ensure that these forms are accurate and filed on time to avoid penalties.

The Penalties for Non-Compliance

Failure to comply with ACA regulations can result in significant penalties. For example:

Late Filing Penalties: Employers who file ACA forms after the deadline may face fines of up to $270 per return or statement, with a maximum penalty of $1,113,000.
Employer Shared Responsibility Penalty: If an employer fails to offer affordable health coverage, they may face a penalty of $2,000 per full-time employee (excluding the first 30 employees).

Given these potential penalties, it’s essential for payroll providers to ensure that businesses are not only compliant but proactive in managing their ACA obligations.

Conclusion

For payroll providers, offering ACA compliance services is an opportunity to provide value to clients while ensuring they meet their legal obligations. Tools like ACA-Track simplify the complex task of ACA compliance by offering robust tracking, reporting, and error-fixing capabilities. By leveraging ACA-Track, payroll providers can help businesses confidently navigate the ACA reporting landscape, avoid costly penalties, and maintain compliance year after year.

If you’re a payroll provider looking to simplify ACA compliance for your clients, ACA-Track offers the ideal solution—streamlining the entire process with easy-to-use, secure, and reliable tools.