What are the main ACA reporting responsibilities of HR?

HR must accurately track employee work hours, determine full-time status, collect insurance offer data, and ensure the timely preparation and distribution of ACA forms 1095-C to employees and 1094-C filings to the IRS.

How does failing to comply with ACA reporting impact employers?

Noncompliance can lead to penalties ranging from hundreds to millions of dollars annually. Employers may also receive IRS penalty letters, risk shared responsibility payments, and face audits that disrupt operations and damage reputations.

Can ACA-Track help HR departments manage complex ACA data requirements?

Yes. ACA-Track centralizes ACA data collection and reporting, supports customizable dashboards, automates federal and state filings, performs monthly line code audits, and offers expert client support, helping HR departments reduce errors and compliance risks.

Why is collaboration important between HR and other departments for ACA compliance?

ACA reporting requires data from Payroll, Benefits, and Finance in addition to HR. Effective collaboration ensures complete, accurate data and smooth preparation of IRS filings, minimizing errors and penalties.

What makes ACA-Track a reliable choice for ACA compliance?

ACA-Track offers a secure, cloud-based platform with SOC 2 Type 2 compliance, customizable features, data integration from multiple systems, and dedicated client success advisors to support HR through every step of ACA reporting and compliance.

Why HR Can’t Ignore ACA Reporting Responsibilities

In today’s complex regulatory environment, Human Resources (HR) departments face many challenges. One of the most critical—but often underestimated—responsibilities is compliance with the Affordable Care Act (ACA) reporting requirements. Ignoring these responsibilities can lead to costly penalties, legal risks, and operational headaches. This article explores why HR must take ACA reporting seriously and how partnering with trusted compliance solutions like ACA-Track can make this process manageable and accurate.

Understanding the Stakes: What is ACA Reporting?

The Affordable Care Act requires Applicable Large Employers (ALEs)—typically those with 50 or more full-time or full-time equivalent employees—to track, report, and offer health insurance that meets affordability and minimum value standards. The two primary reporting forms HR must manage are:

Form 1095-C: Provided to employees, detailing the health coverage offered.
Form 1094-C: Transmitted to the IRS as a summary of employer coverage offerings.

Accurate ACA reporting determines whether an employer faces penalties or shared responsibility payments if employees obtain Marketplace subsidies due to inadequate coverage offers.

Why HR is at the Center of ACA Compliance

1. Data Collection and Accuracy

HR is often the department responsible for managing employee data—hire dates, hours worked, full-time status, insurance offers, waivers, and terminations. This data is critical for ACA reporting.

Tracking hours worked: HR must monitor full-time, part-time, and variable-hour employees’ hours precisely to determine eligibility for health coverage.
Coordinating data across systems: ACA compliance involves integrating data from payroll, timekeeping, benefits administration, and HRIS systems.

Without HR’s diligent oversight, data inaccuracies and missing information can lead to reporting errors and penalties.

2. Collaboration Across Departments

ACA reporting isn’t HR’s job alone. It requires close cooperation with Payroll, Benefits, and Finance teams to ensure:

Employee hours are tracked and reported correctly.
Insurance offers are accurately documented.
IRS filings meet regulatory deadlines.

HR usually coordinates these cross-departmental efforts, making it essential for the function to understand ACA compliance deeply.

Consequences of Ignoring ACA Reporting Responsibilities

Failing to comply with ACA reporting requirements can have severe financial and reputational consequences for employers:

Significant penalties: For example, penalties can range from $50 to $270 per return or statement, escalating sharply with delays or errors, sometimes reaching millions annually.
Shared responsibility payments: If the employer does not offer affordable, minimum value coverage to full-time employees, the IRS can levy per-employee monthly fines.
IRS Penalty Letters (e.g., Letter 226-J): These require prompt responses and extensive documentation; mishandling them can compound costs and audits.
Employee dissatisfaction and legal exposure: Incorrect reporting can result in employee confusion or disputes about their health coverage.

How ACA-Track Helps HR Simplify Compliance

Managing ACA compliance manually or with disparate systems can be overwhelming. That’s where a specialized ACA compliance solution like ACA-Track becomes invaluable.

Key Benefits of ACA-Track for HR:

Complete Data Integration: ACA-Track collects actual hours worked for 100% of employees, including variable hour, part-time, and substitute workers, integrating seamlessly with payroll and HRIS systems.
Accurate Monitoring: It monitors eligibility thresholds, employee events like waivers and leaves, and alerts HR to changes needing attention.
Error Reduction: Monthly line code audits and color-coded warnings flag anomalies early, preventing costly reporting mistakes.
Comprehensive Reporting: Generates IRS-compliant 1094-C and 1095-C forms, with the ability to file electronically via XML, saving time and reducing risk.
Dedicated Support: A Client Success Advisor assists with setup, ongoing compliance, and IRS corrections, making ACA compliance approachable for HR teams of any size.
Security and Compliance: ACA-Track’s cloud-based system meets strict data security standards (SOC 2 Type 2 compliant, encrypted data transfers), ensuring sensitive employee information remains safe.

Practical HR Takeaways for ACA Compliance

Never stop tracking employee hours: Even part-time or variable hour workers must be monitored closely to confirm eligibility status.
Use technology for data accuracy: Manual tracking is error-prone; invest in software like ACA-Track to automate data collection and reporting.
Stay on top of deadlines: Ensure timely distribution of Form 1095-C to employees (by January 31) and Form 1094-C filing with the IRS (by March 31).
Prepare for audits and penalty letters: Keep ACA compliance data organized and accessible in case of IRS inquiries or 226-J penalty notices.
Collaborate internally: HR must lead coordination between Payroll, Benefits, and Finance to compile comprehensive and accurate ACA reports.

Conclusion: ACA Reporting is an HR Imperative

ACA compliance is a complex, data-intensive, and time-sensitive responsibility that HR cannot afford to ignore. Mistakes can lead to steep penalties, while meticulous compliance protects your organization and your employees. With the right tools—like ACA-Track—and a committed HR team, employers can confidently navigate ACA requirements, reduce risk, and streamline reporting processes.

Embracing ACA reporting as a strategic HR function will save your organization from headaches and fines, freeing HR to focus on supporting your workforce’s overall health and well-being.

For more information on how to simplify and master ACA compliance, visit ACA-Track and discover solutions tailored to your business’s unique needs.