The Ultimate Educational Guide for HR Professionals on ACA Compliance with ACA-Track
The Affordable Care Act (ACA) continues to impact employers of all sizes, especially Applicable Large Employers (ALEs) who must comply with complex regulations to avoid costly penalties. For HR professionals, understanding ACA requirements, managing employee eligibility, tracking hours, and filing accurate reports is critical. Fortunately, with comprehensive ACA compliance solutions like ACA-Track, the process becomes far more manageable.
This guide provides a detailed overview of ACA basics, reporting requirements, non-compliance risks, and how ACA-Track’s advanced tools can simplify ACA compliance for HR teams and businesses.
Part I: Understanding ACA Compliance for Employers
What Does the Affordable Care Act Mean for Employers?
The ACA requires certain employers, known as Applicable Large Employers (ALEs), to provide affordable health insurance coverage that meets minimum value standards to full-time employees and their dependents. Failure to comply can result in employer shared responsibility payments (penalties) if employees receive premium tax credits through the Health Insurance Marketplace.
Who Is Considered an Applicable Large Employer (ALE)?
An ALE generally has 50 or more full-time employees, including full-time equivalents (FTEs). These numbers are calculated based on the prior year’s workforce. For example, if your company had 40 full-time employees and part-time employees whose hours combine to equal 10 FTEs, your business qualifies as an ALE.
Why Track Part-Time and Variable Hour Employees?
Accurate tracking of all employees’ hours, including part-time and variable hour workers, is essential. ACA requires employers to offer insurance to employees who average 30 or more hours per week. Without documented hours, employers risk penalties if employees obtain Marketplace coverage and claim the employer did not provide affordable insurance.
Part II: ACA Reporting Requirements and Responsibilities
What Forms Must ALEs Submit?
ALEs must file IRS Forms 1094-C (transmittal) and 1095-C (employee statements) annually. These forms report whether the employer offered coverage, who was eligible, and other critical data used by the IRS to assess compliance.
What Data Is Needed for ACA Reporting?
Data for ACA reporting includes:
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Employee full-time/part-time status and hours worked
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Hire, termination, and status change dates
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Health insurance coverage offered or waived
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Employer identification and IRS authorization info
Data is gathered from multiple departments—HR, Payroll, Benefits, and Finance—making integration and accuracy a challenge.
Deadlines to Remember
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1095-C forms to employees are generally due by January 31 (with some extensions).
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1094-C transmittals to the IRS are due by March 31.
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Employers with 250+ employees must file electronically and obtain a Transmitter Control Code (TCC) from the IRS in advance.
Part III: Consequences of Non-Compliance
Penalties and Employer Shared Responsibility Payments
Penalties for non-compliance can be significant:
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Late filing fees start at $50 per return and escalate to $270 per return or statement.
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Failure to provide minimum essential coverage can trigger per-employee penalties up to $2,000 monthly (excluding the first 30 employees).
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Employers may receive IRS 226-J penalty letters detailing specific violations and penalties.
What To Do If You Receive a 226-J Penalty Letter
Respond promptly within the 30-day deadline. Review employee records, Marketplace subsidy notices, and insurance offers to identify errors. Consult legal or ACA compliance experts to resolve issues and avoid further penalties.
Part IV: Why ACA-Track Is Essential for HR Professionals
ACA compliance requires accurate data collection, monitoring, and reporting across diverse systems and employee types. Here’s how ACA-Track helps HR professionals and organizations navigate ACA complexities with confidence.
Comprehensive Data Collection
ACA-Track collects actual hours worked for all employee types—including variable hour, part-time, paraprofessional, and substitute employees—from multiple sources like timekeeping systems, payroll, manual entries, and mobile devices.
Advanced Monitoring and Alerts
The software monitors employee eligibility thresholds in real time, tracking events such as waivers, leaves, and new hires. It sends advance alerts when employees approach ACA eligibility, so your team can proactively manage offers of coverage.
Accurate and Efficient Reporting
ACA-Track automates IRS Forms 1094-C and 1095-C reporting, including state filings, and files electronic XML submissions directly with the IRS. It also helps fix errors before submission, reducing the risk of penalties.
User-Friendly, Customizable Interface
HR teams can customize dashboards to show the most relevant data fields, filter and sort employee groups, and drill down into individual employee ACA histories. Its snapshot summary preserves payroll data views over time, simplifying audits and reporting.
Flexible Configuration to Fit Your Business
Whether adjusting measurement periods, FTE calculations, waiver codes, or affordability percentages, ACA-Track adapts to your company’s specific needs and regulatory changes.
Data Security and Compliance
ACA-Track operates in a secure, SAS 70 and SSAE 16 certified cloud environment with encrypted data transfers. It does not store HIPAA-related medical info and maintains strict data privacy safeguards.
Dedicated Client Support
Every ACA-Track client receives a dedicated Client Success Advisor to guide them through setup, data integration, and ongoing compliance management.
Conclusion
ACA compliance is a multifaceted challenge involving data from payroll, HR, finance, and benefits departments, with steep penalties for errors or missed deadlines. For HR professionals tasked with managing ACA requirements, having a reliable, data-driven, secure solution is critical.
With ACA-Track, companies can confidently track employee hours, monitor eligibility, generate IRS-compliant reports, and maintain complete audit trails. This all-in-one platform reduces risk, saves time, and empowers HR teams to focus on strategic initiatives instead of ACA headaches.
