After a change in administration and months of waiting on new legislature, we can confidently report that the ACA is here to stay. Well, for this tax year, at least. Sure, changes to legislation may come, but you – the employer – are still on the hook for 2017 reporting.
This means it’s once again time to dust off those ACA how-to’s and start getting up close and personal with your employee data.
The good news is that (so far) there don’t appear to be any major changes to how or what you’ll be reporting. Yay! However, we also don’t expect to have the luxury of an extension. That means employees will need to receive their 1095-Cs by January 31, 2018, and you’ll need to file by February 28, 2018 (if filing by paper) or March 31, 2018 (if filing electronically).
But don’t fret! We’ve outlined the three most important things you should be doing now to stay on track, below. Follow along and visit our ACA page to find out how we can help you simplify compliance.
Confirm Your ALE Status
You were an Applicable Large Employer (ALE) last year, so you’re an ALE this year, right? Not necessarily. If you’ve experienced turnover in your organization and have fallen below 50 or more full-time employees (including full-time equivalents) then you don’t have to file. However, if you’re at or above the 50-employee threshold, then it’s ACA business as usual.
Double check your calculations to verify whether or not you actually qualify as an ALE. If you do, keep reading.
Start Reviewing Your Employee Data
Once you’ve determined that you are an ALE, it’s time to get familiar with your employee data. More specifically, you’ll need to either update or verify these four pieces of information:
- Hire Date: New employee data will be easy, but don’t forget to review details for rehired employees. Look at their full-time or part-time status, their ACA status based on hours worked (remember, ACA status and working status may differ based on hours), and whether or not their hire date affects their benefits eligibility.
- Termination Date: It’s not uncommon for you to terminate an employee but forget to actually, you know, put their termination date into your software. The problem is, when this happens, your software will think that they were an employee but that they weren’t offered coverage. Avoid this costly mistake but taking the time to review and verify that termination dates are included and accurate.
- ACA Status: If you didn’t do this with their hire date, do it now. As a reminder, ACA status is based on hours worked. If an employee works at least 30 hours/week or 130 hours/month, they’re full time. Keep in mind that an employee’s ACA status can change throughout the year depending on your measurement periods.
- Benefit Enrollment Date: Your employee enrollment records should match the day an employee enrolled in benefits, not the date benefit deductions began in payroll. If information isn’t properly marked, then Part II of your employee forms 1095-C will be wrong, specifically line 16. Incorrect forms leave your organization open to the possibility of penalties.
Review Your Employee Benefits
Benefits are the glue that holds the ACA together, so they’re a pretty big deal. As such, you should pay close attention to the details so that you can feel confident setting your coverage records and eventually, completing your forms 1094-C and 1095-C. That’s why it’s important to take a closer look at:
- How benefits affect the ACA: Does your plan provide minimum essential coverage and minimum value? Is it considered affordable? You should be able to confidently answer both of those questions for all current plans, as well as any changes to your plans made during Open Enrollment.
- How Open Enrollment will/won’t affect your ACA reporting: The timing of your Open Enrollment period determines how many benefit records and, potentially, coverage records each employee has. Having two records isn’t a problem, as long as the information remains accurate throughout the entire year. Just be sure to review details before and then again after Open Enrollment to make sure your t’s are crossed and your i’s are dotted.
- Eligibility rules: Under the ACA, only full-time employees of ALEs must be offered benefits. If you’re using an HRIS, you most likely can configure eligibility rules to only offer benefits to employees who meet that criteria (if you aren’t using an HRIS, check out SentricWorkforce). Most organizations will do this by looking at specific fields such as hire date, status (active or terminated), and status category (full or part-time). However, there are times when another field might be needed to target a specific group of employees. For example, location. If you have offices in five different states and each state needs to correspond with a benefits plan. If the location field isn’t chosen in your eligibility rules, then all plans will show for all employees. Long story short, check your eligibility rules to make sure that only the right plans are shown to eligible employees.