Affordable Care Act (ACA) reporting season is here! Even with the IRS extending the deadline for delivering the 2019 1095-C forms to employees (
Here are five crucial factors employers must consider when choosing an ACA reporting service:
1. What data is required and how hard is it to collect and format?
Any ACA reporting service vendor will need data from you to correctly pull reports and populate the required IRS forms, proving you are compliant with the ACA. Make sure to check exactly what data they need from you and how hard (or easy!) it is for you to collect and organize that in the proper format so you can estimate your work effort around this.
At a minimum, they’ll request the following information from your payroll system:
- Employee demographic data (e.g. name, address, SSN, date of hire/termination)
- Employee hours by month (or by pay period)
From the benefits system, they may also need to know which employees and employee dependents enrolled into coverage each month.
Ideally the data is easy for you to generate, the vendor has a secure way for you to transfer the (sensitive!) employee data to them, and the vendor takes care of organizing the data for you.
2. Do they truly do “everything” or are there tasks you must tackle?
Besides providing the data as mentioned above, what else are you responsible for? Ideally NOTHING, except signing off on the IRS forms the vendor creates and if needed, providing corrected data based on any errors reported by the IRS (for example, an incorrect social security number).
A good ACA reporting services vendor will also provide monthly eligibility reports for you, allowing you to know which employees to offer health coverage to stay compliant with the ACA.
Some vendors even work with you to understand health plan design as it relates to ACA compliance (e.g. plan start dates, cost of coverage, measurement periods, waiting periods, etc.)
3. Do they have a form distribution service?
Besides generating the required reports and forms, employers must:
- Send out 1095-Cs to employees on time. A good ACA reporting services vendor will handle all this for you. If you absolutely want to mail the forms yourself, make sure the vendor can provide you with pdfs of the forms for you to print and distribute.
- E-file the 1094-C transmittal form with the IRS on time. A good ACA reporting services vendor not only does that for you but will work with you to resolve any errors reported back from the IRS.
4. Is their staff easy to work with?
Do you have a dedicated, knowledgeable person to work with? Ideally, a senior account representative is assigned to you that understands ACA compliance and your business needs to come up with the best results.
5. Is Security Guaranteed with an ACA reporting service?
What many employers may not realize is that ACA reporting services pop up overnight and fail to meet security compliance standards. That means they’re not encrypting sensitive data, including social security numbers and tax identification numbers.
In today’s digitally-driven society, businesses must ensure customer data is secure both during transport and at the reporting service. That means data encryption occurs and data is only accessible by those performing services for you.
Wrapping up: Compliance Is Critical, Outsourcing ACA can help
Consider outsourcing your Affordable Care Act (ACA) tracking and reporting this season -reducing your workload while simultaneously ensuring your ACA compliance is properly managed, minimizing the risk of steep penalties.
With Integrity Data’s