Is ACA Compliance Top of Mind Before You Receive an IRS Notice? ADP

Or what if you’ve been filing your Forms 1094-C/1095-C each year by March 31 and, suddenly, the dreaded envelope arrives from the IRS? The notice states you have a potential ACA penalty because you failed to offer your full-time employees affordable, minimum value, minimum essential coverage. The ACA can significantly impact your company’s employee benefits, compliance, financial planning objectives, and resources. It is important to understand the impact to ensure alignment with strategic goals. The Affordable Care Act is a comprehensive health care reform law enacted in March 2010 that impacts both employers and individuals.

Step 1: Calculate Full-time and FTE Employees

Her knowledge and practical advice form the backbone of our discussion, ensuring that you receive accurate, actionable information to guide your ACA compliance strategies. When you partner with ADP, your organization’s ACA compliance is backed by real-time status visibility, and seamless data integration all designed to help you keep your business in compliance and penalty-free. Streamline benefits administration — from benefits education and enrollment — to Affordable Care Act (ACA) compliance and annual reporting. “The ACA being repealed is incredibly unlikely — it’s here to stay. At the end of the day, it’s likely to be more complex,” she says. Adding to the complexity, a number of states and municipalities (New Jersey and Washington D.C., for example) are looking to add additional reporting requirements.

• Employers that fail to meet applicable reporting requirements may be subject to penalties.
• Making an impact, shaping the future together, and putting the “people” into “Always Designing for People.
• Furthermore, the potential impact of not providing a timely, qualifying offer of health insurance coverage could negatively impact workforce health and morale.
• This essential document details the type of health coverage offered, the lowest premium available to each employee, and the specific months when coverage was accessible, including when the employee and dependents were enrolled.
• The notice states you have a potential ACA penalty because you failed to offer your full-time employees affordable, minimum value, minimum essential coverage.

Master ACA compliance with confidence

This obligation extends to non-traditional workers, including seasonal employees and F-1 visa holders. It’s important for employers to assess each employee’s hours of service in relation to the ACA’s full-time definition, regardless of how they classify full-time and part-time employees internally. Each year, employers are required to file Form 1095-C with the IRS and provide a copy to all employees who were full-time or were enrolled in self-insured coverage for one or more months during the year. In addition, Forms 1094-C/1095-C must be filed with the IRS and all applicable state agencies each tax year, confirming that timely, affordable and ACA-compliant coverage was offered to eligible full-time employees every month.

ACA Data Can Support Business Decisions For Your Shifting Workforce

To reduce their exposure to penalties, businesses must ensure that their data-keeping practices are accurate and review the requirements for ACA compliance monthly. They were not taking advantage of ADP’s penalty management service at the time, and this took place during a tax year when ADP was not a provider for this client. However, Tomassetti and her team took the time to help them through the penalty process, and the organization has since upgraded to ADP’s penalty management service. Outside partners can provide full service expertise, which may include assistance with matters ranging from tracking eligibility, affordability, and safe harbor data to printing forms or transmitting data to the IRS. They can even handle responding to the IRS in the event of a penalty. A full service approach also tends to increase organizational satisfaction, ADP Research Institute’s® 2018 ACA Pulse Check report shows.

Stay in the Know

• By substantiating the required ACA efforts and working with a third-party provider proficient in ACA requirements, you help drive support for these missions while mitigating risk.
• No company wants to receive an ACA (Affordable Care Act) penalty notice from the IRS.
• Despite these differences, they all share a similar compliance approach.
• Additionally, the first IRS penalty notices were issued in fall 2017 for the 2015 tax year.
• ACA plans also cannot deny coverage or charge higher premiums based on pre-existing conditions and must offer preventive care services at no additional cost to the insured.

You will proactively work to identify problems and offer solutions to improve the internal operation and administration of the plans. You will respond to complex client issues and escalations to ensure that support rendered meets or exceeds the client’s needs to ensure client satisfaction. You will work with the various TotalSource service providers to identify and resolve issues and take a proactive approach to establish systematic processes and procedures to reduce or eliminate errors. You will develop and implement the workflow (both manual and electronic) to ensure that the transactions are accurately processed by TotalSource service providers such as Section 125/FSA, COBRA, 401(k), etc. Every year, employers must file Form 1095-C with the IRS and provide it to all full-time employees or those enrolled in self-insured coverage for any month during the year. This essential document details the type of health coverage offered, the lowest premium available to each employee, and the specific months when coverage was accessible, including when the employee and dependents were enrolled.

In addition, ESRP notices are issued when timely, affordable and appropriate benefits are not offered to full-time employees and adp aca their dependents. These notifications include the employees who triggered the ESRP, the incurred penalty – IRS Code Section 4980H(a), (b) or both – and the assessed dollar amounts for each violation. The ACA applies to applicable large employers (ALEs), which are businesses that had 50 or more full-time and full-time equivalent (FTE) employees on average during the previous year. When determining full-time status, it’s best practice to measure all employees within an organization because traditional HR status does not always reflect ACA benefits eligibility. Beginning in 2014, most Americans were required to obtain minimum essential coverage (known as the “individual mandate”). These forms will assist the IRS in identifying which individuals were offered or had coverage through their respective employers.

ACA Reporting Road Map

We’ve tackled crucial questions and provided straightforward answers, helping you ensure that your organization meets ACA standards and optimizes healthcare offerings for your employees. From seamless data integration to real-time status visibility, simplify your ACA processes with ADP’s SmartCompliance platform. Our cloud-based solution includes automated eligibility tracking, affordability calculations, and federal and state reporting, all designed to help you avoid penalties. The IRS generates penalty notices for each tax year based upon the Forms 1094-C/1095-C that were filed or required to be filed by employers, as well as data available from other sources (Form W-2, federal affordability measures, etc.). If any of the forms are late, incomplete or inaccurate, the “reasonable cause” standard applies.

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