What is ACA tracking and why is it important?

ACA tracking is the process employers use to collect and monitor employee hours worked and eligibility to comply with the Affordable Care Act (ACA). Accurate tracking ensures that Applicable Large Employers (ALEs) offer health coverage to employees who qualify and helps avoid IRS penalties.

Who is required to perform ACA tracking?

Employers with 50 or more full-time or full-time equivalent employees, called Applicable Large Employers (ALEs), must track employee hours and coverage offers to meet ACA requirements and avoid shared responsibility penalties.

What employee data is collected during ACA tracking?

ACA tracking collects detailed hours worked for all employee types including full-time, part-time, variable hour, and seasonal workers. It also monitors employee status changes such as new hires, terminations, leaves, and insurance waivers.

How does ACA tracking help with ACA reporting?

By accurately tracking employee hours and eligibility, ACA tracking enables employers to generate required IRS forms 1094-C and 1095-C. This ensures timely and error-free federal and state ACA reporting, helping businesses stay compliant.

How does ACA-Track support employers with ACA tracking?

ACA-Track provides an integrated platform that collects employee hours from multiple systems, monitors eligibility thresholds, and generates electronic ACA reports. Its secure, user-friendly system simplifies compliance and helps avoid costly IRS penalties.

What is ACA Tracking

What is ACA Tracking? A Deep Dive into ACA Compliance with ACA-Track

Understanding ACA tracking is essential for businesses navigating the complexities of the Affordable Care Act (ACA). As an employer, especially if you are an Applicable Large Employer (ALE), tracking employee hours and compliance data isn’t just good practice—it’s the law. In this comprehensive guide, we’ll explore what ACA tracking entails, why it matters, and how solutions like ACA-Track can simplify compliance, reporting, and employee eligibility monitoring.

What Is ACA Tracking?

ACA tracking refers to the process of collecting, monitoring, and reporting employee data to ensure compliance with the Affordable Care Act’s employer mandates. The ACA requires ALEs—employers with 50 or more full-time or full-time equivalent employees—to offer affordable health insurance that provides minimum value to full-time employees and their dependents, or potentially face penalties.

At its core, ACA tracking involves:

Collecting accurate hours worked data for all employee types—including full-time, part-time, variable hour, and seasonal workers.
Monitoring employee eligibility based on ACA definitions of full-time status (typically 30 hours per week or 130 hours per month on average).
Generating accurate ACA reports such as Forms 1094-C and 1095-C for IRS submission and employee distribution.
Ensuring compliance to avoid costly penalties and streamline audit responses.

Because ACA compliance data originates from multiple departments—HR, payroll, benefits, and finance—effective ACA tracking requires a unified approach and reliable technology to aggregate and manage all relevant information.

Why Is ACA Tracking Critical?

Compliance with Employer Shared Responsibility Rules

Section 4980H of the Internal Revenue Code mandates that ALEs either offer qualifying health coverage or face shared responsibility payments. Failure to track and prove that employees are eligible for coverage or have been offered coverage can expose companies to penalties.

Avoiding Penalties

Non-compliance penalties can be significant. For example, late filing or failure to furnish ACA forms can result in fines up to $270 per form, with maximum limits exceeding a million dollars. Moreover, if an ALE fails to offer coverage or offers coverage that is unaffordable or doesn’t provide minimum value, the employer could face monthly penalties of $2,000 per full-time employee (excluding the first 30).

Accurate Employee Eligibility Determination

Many employees have variable schedules—part-time, seasonal, or fluctuating hours. Tracking actual hours worked is the only way to accurately identify full-time equivalents (FTEs) and determine who is eligible for coverage. Without tracking, employers risk misclassification, which can lead to penalties.

Simplified Reporting & Audit Readiness

The IRS requires ALEs to file annual ACA returns via Forms 1094-C and 1095-C. In case of an audit or IRS inquiry, having all ACA data centralized and documented simplifies compliance verification.

How Does ACA-Track Help with ACA Tracking?

ACA-Track is a comprehensive ACA compliance solution designed to make ACA tracking and reporting simple, accurate, and secure. Its features align directly with the complex needs of employers managing ACA compliance:

Collect: Employee Hours Worked

Tracks hours for all employee types—full-time, part-time, variable hour, substitute, and paraprofessionals.
Integrates data from multiple sources including payroll systems, time clocks, manual timesheets, and even employee mobile devices.
Supports tracking for variable hour employees, crucial for eligibility determination.

Monitor: Employee Eligibility and Events

Automatically monitors eligibility thresholds and sends alerts when employees approach or exceed ACA full-time status.
Tracks key employee events such as waivers, leaves, hires, and terminations to maintain accurate compliance data.

Report: Federal & State ACA Reporting with Confidence

Produces comprehensive 1094-C and 1095-C forms with easy electronic filing options.
Facilitates electronic XML filing directly to the IRS, ensuring compliance with AIR (Affordable Care Act Information Returns) standards.
Maintains all ACA compliance data in one secure location, allowing quick access for audits or state exchange requests.
Offers monthly line code audits and error correction to keep reporting accurate and penalty-free.

Customizable & User-Friendly

Custom dashboards let users tailor data views and filter information by ACA status, employee type, location, and more.
Snap Shot Summary preserves data views over time, maintaining historical payroll and insurance data exactly as it was.
Flexible configuration options support measurement periods, administrative periods, hours calculations, waiver codes, and affordability percentages.
Data-rich interface supports power users and novices alike, with color-coded warnings for anomalies and errors.

Secure & Reliable

Hosted in a SAS 70 and SSAE 16 certified data center, SOC 2 type 2 compliant.
Encrypts personally identifiable information and conducts all data transfers over HTTPS.
Avoids storing HIPAA-related medical information, reducing compliance risk.

Who Should Use ACA-Track?

If your company is an Applicable Large Employer or self-insured employer required to comply with ACA reporting and tracking rules, ACA-Track is designed for you. Whether you are a business, organization, or a service provider managing multiple clients, ACA-Track offers:

Flexible plans and pricing to fit your unique needs.
Dedicated Client Success Advisors who make ACA compliance easy and stress-free.
Integration with any payroll, HRIS, or financial management system.

Why Outsource ACA Tracking and Reporting?

Handling ACA compliance in-house can be overwhelming because data is spread across multiple departments and systems. Outsourcing to a trusted provider like ACA-Track offers benefits such as:

Reducing errors in reporting and data handling.
Streamlining the IRS filing process with electronic submissions.
Access to specialized expertise and support.
Minimizing penalties and managing IRS correspondence effectively, including IRS 226-J penalty letters.

Conclusion

ACA tracking is more than just tallying hours; it is a crucial process for employers to comply with the ACA’s complex requirements. With penalties on the line and data coming from multiple sources, employers need reliable, efficient, and secure tools to track employee hours, eligibility, and reporting obligations.

ACA-Track stands out as a comprehensive ACA compliance solution that simplifies these tasks through data integration, automation, and expert support. If ACA compliance feels daunting, ACA-Track offers the plan and tools to keep your business confident and compliant every step of the way.

For more detailed information and to explore ACA-Track’s offerings, visit their website at https://aca-track.com/. Stay ahead of ACA compliance with a trusted partner by your side!