5 Reasons Why ACA Reporting is So Difficult for Employers This Year

April 18, 2016 Robert Sheen Affordable Care Act, Applicable Large Employer (ALE), IRS

For many employers, this is their first year reporting employee health care coverage as part of the Affordable Care Act. Required employers include those that are ALEs,or Applicable Large Employers with 50 or more full-time employees and equivalents.

The reporting appears simple at face value but in execution, the process was not due to several reasons. Well before the close of last year, the IRS released drafts of Forms 1095/1095-C and Forms 1094/1095-B with instructions. In September of 2015, the final forms were released and many employers chose that day to begin modifying their systems with necessary programming changes. This produced significant errors, and while the IRS allows for a margin of error in reporting, the delay by employers and their vendors in modifying their systems contributed to this. Further, many employers lacked a true understanding of what the aforementioned forms entailed. Aggregating data posed another problem for employers, as collecting employee information for these forms proved to be challenging, especially with information scattered among various employer data applications. Even those third party vendors who offered assistance to employers encountered their own difficulties, as many of them also lacked understanding in all of the nuances of ACA reporting and had ill equipped systems to address the ACA’s reporting requirements.

While the preparation of the forms had its share of problems, the e-filing of these forms with the IRS appears to prove to be equally troublesome. The implementation of a Transmitter Control Code (TCC) for the Affordable Care Act Information Returns Program (AIR) was issued to one or multiple parties for reporting. However, the AIR system continues to be upgraded, requiring employers and their vendors to keep up with the upgrades.

The ACA Times, in conjunction with First Capitol Consulting, provides articles highlighting valuable information for employers and ACA reporting. As employer head into the next tax year, should employers still have questions on ACA reporting, they are urged to check the ACA Times.

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