One of our recent posts provided information about keeping up with ACA Compliance / Health Care Reform filing requirements under Form 1095-C and Form 1094-C.
Since then, the Form 1095-C deadline has come and gone. We hope that you were able to meet the March 31 deadline to send the forms to all your employees. We thought this would be a good time to raise the warning flag again: this time to remind you that the electronic filing deadline is just around the corner to file the corresponding ACA information with the IRS using Form 1094-C.
What is Form 1094-C again?
Think of the Form 1094-C as the summary sheet that you will submit to IRS each year when you batch up IRS’ copies of Forms 1094-C that you sent to your employees to verify the health coverage that you provided to them.
The deadline for filing Form 1094-C is June 30, 2016. The key takeaway from this post is that no matter what legislative proposals you have heard about to repeal or revise ACA, the deadline for filing Form 1094-C in 2016 is not going away. In addition, the IRS has said that it will not give extensions of this deadline to employers who struggle with compliance with ACA. IRS extended the deadline in the first year of ACA compliance but does not intend to repeat the act of leniency this year.
Have you completed your reporting?
Many employers seem surprised by the complex data sorting process. Data sorting is never simple, especially if your data collection system did not collect the precise information required to complete the reporting process. If you are a large employer and you have not started the reporting process, you may find that the time needed to simply clean your organization’s data to make it usable will take you beyond the filing deadline.
Bear in mind, too, that IRS requires that employers apply for certification before they can transmit electronically to the IRS and that process alone takes time.
What happens if I miss the deadline?
Penalties apply. Remember, the Congressional Budget Office has estimated $9 billion in revenue from employer penalties for ACA non-compliance this year. You do not want your organization’s penalties to prove that number.
Integrate your data. One positive change that can come out of this compliance effort is the realization that your system holds data in too many places. Perhaps, payroll information uses one system while another system tracks hours of employment and time off. You have probably learned this year that having data in more than one place makes this a time-consuming process. The duplication effort unnecessarily complicates the reporting process as well.
You may also realize now how important it is to keep cleaned data separate from incoming data until the system cleans the new data. Maintaining clean data sets minimizes effort duplication, errors, and saves both time and money.
There are firms who have managed this process before and can help you manage yours. It also helps to demonstrate to auditors that you are serious about compliance which may help mitigate penalties if penalties for non-compliance come into play.
Prepare Now for 2017 Reporting
If the compliance reporting process has shown you that your HR system is deficient, you will want to research a new system, preferably one with a single database. After all, systems that have never shared information before, now have to share data and file reports based on that shared data. Most importantly, you must maintain for seven years the payroll, benefits and HR data that goes into the reports. How much easier will that be if the new system consolidates data into one database.
To talk more about ACA reporting, or anything else, please contact us. We want to help you put the right systems in place to comply with the requirements of the Affordable Care Act.