The Affordable Care Act (ACA) is imposing new reporting requirements for businesses which can be as confusing as they are intimidating. Although some data must be captured monthly, employers will be preparing annual reports and can sustain hefty fines for not reporting or for reporting inaccurate information. Here’s a few basic facts and some tips that you can use to get ACA reporting under control.
As indicated in “New information reporting requirements under the Affordable Care Act,” posted by Bill O’Malley and Jill Harris on McGladrey.com, the IRS has issued draft versions of the ACA forms which will be finalized later this year. Based on the draft forms and instructions, the reporting system will be similar to the W-2 system in that a form, either Form 1095-B or 1095-C, will be prepared for each applicable employee and submitted to the IRS with a transmittal form, either 1094-B or 1094-C. Forms will be due to the IRS by February 28th for the previous calendar year or by March 31 if filed electronically, which will be required of employers submitting 250 forms or more. Here are additional tips that can help clear up some of the confusion:
- Read Publication 5196: A link to this document is included in the article and explains the different forms required for reporting.
- Speak with business partners: Work with your healthcare insurer or other third-party administrators, as well as payroll vendors, to determine who is capable of capturing the data needed for ACA reporting and preparing the appropriate forms. Your business partners may charge for this service and it’s worth considering whether to assume the added control (and expense) of managing this data internally.
- Review forms: Download the draft forms and review the draft instructions and the forms to learn about the types of data needed for each form.
- Create a plan: Determine how you or your third-party business partners are going to capture this data, including health care coverage and monthly enrollment data. Strengthening your business systems with appropriate technology can streamline data capture and reporting, saving time and money.
- Test and go-live: Make sure your systems are in place and fully tested so that you are prepared when ACA reporting is required.
The ACA reporting requirements can be confusing; however, we can help. Contact BTerrell Group to learn how you can prepare your company to capture the data needed for ACA reporting, create accurate timely reports, and avoid stiff penalties.
By BTerrell Group, an Intacct Premier Partner and Sage ERP Partner