Who is responsible for maintaining ACA data accuracy within an organization?

Maintaining ACA data accuracy is a collaborative effort involving HR, Payroll, Benefits, and Finance departments. Clear roles and communication help ensure data is consistent and complete for ACA compliance.

What are the risks of not tracking part-time and variable-hour employees’ actual hours?

Failing to track actual hours for part-time and variable-hour employees can lead to misclassification of full-time status, inaccurate ACA offers, and potential penalties if employees claim premium tax credits through the Marketplace.

How often should ACA data audits and reviews be performed?

Monthly audits and line code reviews are recommended to identify discrepancies early, fix errors promptly, and maintain accurate ACA reporting throughout the year.

What security measures are important when handling ACA compliance data?

Employers should use secure, certified cloud platforms that encrypt personal data, enforce restricted access, and comply with relevant security standards such as SOC 2 Type 2 to protect employee information.

How can ACA-Track simplify ACA compliance for HR and Payroll?

ACA-Track consolidates all ACA-related data in one system, integrates with existing payroll and HRIS, automates eligibility monitoring, offers customizable dashboards, facilitates error correction, and manages electronic filings to the IRS.

Keeping ACA Data Clean Tips for HR and Payroll

Keeping ACA Data Clean: Tips for HR and Payroll

The Affordable Care Act (ACA) brings significant responsibilities for employers, especially for those classified as Applicable Large Employers (ALEs). Accurate data tracking and reporting are crucial to avoid costly penalties and maintain compliance. For HR and payroll professionals, keeping ACA data clean and compliant can feel like a daunting task—but it doesn’t have to be. With the right tools and processes, organizations can confidently manage their ACA obligations and minimize risk.

In this detailed guide, we’ll explore practical tips for HR and payroll teams to maintain clean ACA data, reduce errors, and streamline reporting. We’ll also introduce ACA-Track, a leading ACA compliance solution designed to simplify your ACA tracking, monitoring, and reporting.

Understanding ACA Compliance Basics

Before diving into best practices for data cleanliness, it’s essential to understand why accurate ACA data is so important.

What Does ACA Mean for Employers?

Under Section 4980H of the Internal Revenue Code, ALEs—typically companies with 50 or more full-time employees or full-time equivalents—must offer affordable, minimum-value health coverage to their full-time workforce. Failure to comply can result in significant employer shared responsibility payments (penalties) and IRS scrutiny.

Why Accurate Hour Tracking Matters

Determining which employees qualify as full-time under ACA rules hinges on actual hours worked. Part-time and variable-hour employees must be tracked precisely during measurement periods to establish their eligibility for health coverage offers. Without meticulous tracking, companies risk under-reporting hours and facing penalties if employees seek Marketplace coverage and claim premium tax credits.

Tips for HR and Payroll to Keep ACA Data Clean

1. Centralize Data Collection and Integration

ACA data originates from multiple sources—timekeeping systems, payroll, HRIS, benefits platforms, and even manual timesheets. Centralizing this data into a single, integrated system prevents inconsistencies and data gaps.

Tip: Use a platform like ACA-Track that integrates seamlessly with your existing payroll and HR systems to automatically collect and consolidate employee hours worked across all employee types.

2. Track Actual Hours Worked for All Employee Types

Whether full-time, part-time, variable hour, or substitutes, every employee’s hours must be tracked accurately. Relying on estimates or ignoring variable hour employees puts your organization at risk.

Tip: Implement processes to capture hours from multiple input methods—automated clocks, mobile apps, and manual inputs—and verify accuracy regularly.

3. Establish Clear Measurement, Administrative, and Stability Periods

To comply with ACA, employers must define measurement periods (to track hours), administrative periods (to communicate coverage), and stability periods (during which coverage is offered).

Tip: Use a configurable ACA compliance tool to set and adjust these periods based on your company’s needs and IRS guidelines, minimizing manual errors.

4. Maintain Detailed Employee Status and Event Records

ACA compliance requires documentation beyond hours—hire dates, terminations, leave statuses, waivers, and rehires must be accurately maintained.

Tip: Ensure HR maintains timely updates and flags significant employee events that impact ACA eligibility, linking these directly with ACA tracking software.

5. Perform Monthly Line Code Audits

Monthly audits of 1095-C line codes ensure reported offers of coverage and employee statuses are accurate before year-end reporting.

Tip: Leverage ACA-Track’s monthly line code audit feature to detect and correct reporting errors early, reducing last-minute IRS issues.

6. Prepare for Electronic Filing Requirements

Employers with 250+ employees must file ACA reports electronically using IRS-compliant XML formats.

Tip: Use software like ACA-Track that automatically formats and validates data according to IRS AIR schema and helps obtain and renew the required Transmitter Control Code (TCC).

7. Prioritize Data Security and Privacy

ACA data includes sensitive personal information that must be protected to comply with HIPAA and other privacy regulations.

Tip: Select solutions hosted on secure, certified cloud platforms like ACA-Track’s SAS 70 and SOC 2 Type 2 compliant data center, which encrypts data and transfers it securely.

Why Choose ACA-Track for ACA Data Management?

Managing ACA compliance manually or with disconnected systems can lead to costly mistakes and missed deadlines. ACA-Track offers a comprehensive, user-friendly ACA compliance service designed to take the stress out of tracking, monitoring, and reporting.

Key ACA-Track Benefits:

Complete Data Integration: ACA-Track integrates with any payroll system, HRIS, or timekeeping system to collect accurate hours for 100% of employees.
Advanced Monitoring: Automated alerts notify you when employees reach eligibility thresholds or when events like leaves and waivers occur.
Accurate Reporting: Electronic IRS-approved 1094-C and 1095-C filings, including state reporting, with error detection and correction tools.
Dedicated Client Success Advisor: Personalized support ensures your compliance needs are met efficiently.
Configurable Dashboard: Customize views, filters, and alerts to match your organization’s priorities.
Secure Cloud Hosting: Encrypted data with strict security certifications keeps employee information safe.

By leveraging ACA-Track, HR and payroll teams can reduce manual data entry, improve accuracy, and ensure timely, compliant ACA reporting—all while having expert support available.

Final Thoughts: Making ACA Compliance Manageable

ACA compliance may seem complex, but by following best practices for clean data management and using the right tools, HR and payroll teams can maintain compliance confidently and efficiently. Key takeaways:

Centralize and automate data collection
Track actual hours for all employee categories
Use configurable software to define ACA periods and rules
Perform monthly audits and error checks
Ensure secure handling of sensitive employee data
Partner with a trusted ACA compliance solution like ACA-Track for expert guidance and support

Ready to simplify your ACA compliance journey? Explore how ACA-Track can help your organization keep ACA data clean and reporting error-free.

For more information and to get started, visit ACA-Track today.