How to Train Your HR Team for ACA Tracking and Reporting
The Affordable Care Act (ACA) presents a complex set of requirements for employers, particularly for those classified as Applicable Large Employers (ALEs). One of the most crucial tasks in maintaining compliance is accurate ACA tracking and reporting. For many organizations, especially those with a large workforce, this responsibility falls largely on the HR department. However, ACA compliance extends beyond HR and requires close collaboration between multiple departments such as finance, payroll, and benefits. Proper training of your HR team is essential for successful ACA tracking and reporting, ensuring your company avoids costly penalties and operates smoothly under the law.
To help you achieve this goal, we’ve outlined a detailed roadmap for training your HR team to handle ACA compliance effectively. At the heart of this journey is a comprehensive and user-friendly tool like ACA-Track, which simplifies ACA compliance tracking and reporting while ensuring that your team has the resources they need to stay compliant year-round.
Part I: Understanding the Basics of ACA Compliance
Before diving into the technicalities of tracking and reporting, it’s crucial that your HR team understands the fundamentals of ACA compliance. Here are the key components to grasp:
1. What is ACA Compliance?
ACA compliance requires employers to offer “affordable” health insurance that meets minimum value standards to full-time employees. An “Applicable Large Employer” (ALE) is defined as a company that employs 50 or more full-time employees, including full-time equivalent employees (FTEs). This coverage must be offered to employees who work 30 or more hours per week.
2. Tracking Full-Time vs. Part-Time Employees
HR departments must track full-time employees as well as variable-hour and part-time employees. A full-time employee is defined as one working an average of 30 hours per week or 130 hours per month. However, tracking part-time or variable-hour employees is just as important, as the employer must determine whether these employees qualify for ACA coverage based on their hours worked.
If your organization fails to track hours accurately, it could be at risk for penalties, especially if part-time employees qualify for health coverage through a Marketplace exchange.
Part II: Training HR Teams to Use ACA-Track Effectively
ACA-Track is a powerful tool that simplifies ACA compliance and reporting. To maximize its potential, your HR team needs to be well-versed in how to collect, monitor, and report employee data effectively. Here’s how to train your HR team to use ACA-Track for optimal results.
1. Employee Data Collection
The first step in ACA compliance is collecting accurate employee data, including hours worked, employment status, and insurance coverage status. ACA-Track helps HR teams collect this information from various systems, including timekeeping software, payroll systems, and mobile devices. Make sure your HR team knows how to integrate ACA-Track with your existing payroll or HRIS system to ensure seamless data collection.
Training Tip: Set up a hands-on training session where HR team members input real employee data into ACA-Track, ensuring they understand how the system automatically tracks hours for full-time, part-time, and variable-hour employees.
2. Monitoring Employee Eligibility
ACA compliance hinges on determining whether an employee is eligible for health insurance based on their hours worked. ACA-Track monitors eligibility thresholds and alerts HR teams when an employee exceeds or falls below the required hours for full-time status.
Training Tip: Walk your team through real-world scenarios, where you demonstrate how the system flags employees nearing eligibility. Provide case studies where employees change status, and show how these transitions are tracked by ACA-Track.
3. ACA Reporting and Filing
One of the most critical aspects of ACA compliance is ensuring that the appropriate forms are filed with the IRS, namely the 1094-C and 1095-C forms. These forms report the coverage offered to full-time employees, including information about their coverage status. ACA-Track simplifies this by automatically generating the necessary reports and filing them electronically with the IRS.
Training Tip: Hold a detailed session explaining the specifics of ACA reporting, including timelines for 1095 forms (due to employees by January 31 each year) and the 1094 transmittal (due to the IRS by March 31). Then, walk through the ACA-Track process of generating and submitting these forms.
4. Identifying and Correcting Errors
Tracking and reporting errors are common challenges in ACA compliance. ACA-Track offers tools to identify discrepancies in your data, such as missing hours, incorrect eligibility statuses, or errors in coverage reporting. Errors can lead to costly penalties, so your HR team must know how to resolve these issues quickly.
Training Tip: In your training, focus on the error detection features of ACA-Track. Show your HR team how the software flags discrepancies in real-time and guides them through the steps to fix them before submission.
Part III: Collaboration Across Departments
While the HR department plays a key role in ACA compliance, other departments such as finance, payroll, and benefits must also be involved. Here’s how your HR team should collaborate:
1. Coordination with Payroll
Accurate tracking of employee hours is essential for ACA compliance, and this relies on close coordination between HR and payroll. HR should ensure that payroll data, including hours worked by part-time or variable-hour employees, is correctly integrated with ACA-Track to generate accurate eligibility reports.
2. Communication with Benefits
HR must work with the benefits team to track which employees have waived coverage and which have accepted it. This information is crucial for accurate reporting to the IRS. ACA-Track allows HR teams to monitor employee eligibility in relation to insurance coverage and provide updates as necessary.
3. Collaboration with Finance
Finance teams may be involved in calculating penalties related to ACA non-compliance. ACA-Track offers features that allow your finance team to view detailed reports on potential penalties and employer shared responsibility payments, giving them the information needed to assess risks.
Part IV: Managing ACA Penalties and IRS Letters
Non-compliance with ACA regulations can lead to hefty penalties. Your HR team needs to be prepared to handle potential penalty situations, including receiving IRS penalty letters, such as the 226-J letter, which explains the assessment of penalties for failure to comply.
ACA-Track helps mitigate these risks by ensuring accurate and timely reporting, reducing the likelihood of receiving penalty notices. However, in the event of a penalty, HR teams must know how to review the letter, identify discrepancies, and respond within the required timeframes.
Training Tip: Conduct a role-playing session where your HR team responds to an IRS penalty letter, explaining the steps they would take to resolve discrepancies and ensure future compliance.
Part V: Keeping Your HR Team Updated
ACA compliance regulations can change over time, so it’s essential that your HR team stays updated on any new developments. Regular training sessions, refresher courses, and access to resources like ACA-Track’s dedicated Client Success Advisors can help keep your team well-informed and confident in their roles.
ACA-Track offers ongoing support, including client success advisors who assist with ACA compliance. Encourage your HR team to reach out for assistance whenever necessary, and consider setting up monthly review sessions to go over any changes or updates to the ACA reporting process.
Conclusion
Training your HR team for ACA tracking and reporting is essential for staying compliant and avoiding costly penalties. By utilizing a proven solution like ACA-Track, your HR team will be equipped with the tools they need to collect, monitor, and report employee data with confidence. With the right training and resources in place, you’ll ensure that your organization meets ACA requirements efficiently and effectively, all while reducing risks and maintaining peace of mind.
For more information and to get started with ACA-Track, visit ACA-Track.
