Employers have lost a significant margin of error when it comes to ACA information reporting in 2016. As previously discussed, as the good faith standard for incomplete or inaccurate reporting no longer applies for 2016 reporting, the need for compliance is more vital now than before.
Forms 1094/1095 B and C are being taken very seriously, and last year as the first time mandatory reporting was required under the Affordable Care Act, the IRS provided a certain amount of leeway to employers who have struggled with accuracies in their forms.
As more information has been provided and deadlines became flexible for ACA reporting for the 2015 year, the notion that error and tardiness will continue to be tolerated for the 2016 year is unjustified. And the penalties can pile up, to the tune of $260 per return for large employers, generally maxing out at $3,178,500. It’s an unnecessary expense that may have been easily prevented. And here’s how:
1. Know your employee and benefits data. All of it.
As an employer, your company’s employee and benefits data may not be available in consolidated and easy to review format. Have it available. Understand every part of it, and know when to pull it and how. This includes TINs, SSNs, and full names, as they all are among the most frequent margins of error with information reporting—often either missing and/or incorrect and leading to penalties once 2017 rolls around. For the IRS, data is a big business. It lives on an algorithm that is sophisticated and precise. Your company’s lack of compliance during an IRS audit will not fall beneath the radar.
2. Stay Up To Date With Governmental Changes
Processes change, forms change. The Affordable Care Act is still a work in progress and just this year alone has seen significant changes in what’s to come with new draft forms from even the year prior. Keep abreast of these changes, so when reporting 2016 information next year, you won’t be working off outdated forms.
3. Classify Your Employees Properly
The ACA Times keeps you up to date with all things surrounding Misclassification cases. This is a continuing problem in the United States, so classify workers correctly now to ensure that you’re not slapped with ACA penalties (or even lawsuits beyond the ACA), later.
4. Keep Your Records Clean And Organized
Retain every piece of paperwork supporting your AA reporting, from SSN solicitation forms to opt-out forms. In the event that your records must be referenced, you’ll want completely accurate information. This saves you plenty of trouble during reporting season.
5. Notices Should Not Be Taken Lightly
If a Marketplace Notice comes your way suggesting an employee has received an advanced payment of the Premium Tax Credit, ensure your healthcare coverage meets the requirements. You will have a time limit to dispute it. If you receive an IRS penalty notice from the IRS, again check if was properly issued or was issued in error. An appeal of the IRS penalty notice may be necessary.
6. Compliance Compliance Compliance
Click here for an audit of your company’s information to determine compliance.
7. Team Work Makes The Dream Work
Form a team within your organization that works diligently on ACA information reporting, monitoring, and quality assurance throughout the year. If the team does it right, by the time reporting season rolls around, penalties should not be a concern.
