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The Affordable Care Act Challenge
It sounds simple enough: provide affordable health care coverage to your eligible employees. But the Affordable Care Act (ACA) employer mandate is causing confusion, frustration, and worry among businesses of all sizes, across all industries.
So what makes ACA so challenging?
Before you offer plans and build a strategy around coverage options, you need a firm grasp of what makes an employer compliant. Between meeting minimum essential coverage guidelines, minimum value rules, and affordability requirements, just finding the right combination of coverage for your employees is a daunting task.
Once you have plans set, figuring out which employees are actually eligible is more complicated than it may seem. It requires mountains of data about hire and termination dates, leaves of absence, hours worked, and calculations going back over a year.
Acquisitions and complex ownership structures make understanding compliance even more difficult, as your organization has to account for compliance (and histories of non-compliance) across each entity separately.
Getting the Right Data
Depending on your company’s approach to managing data, you may have pristine records for every employee; or you may be caught in a tangled web of data from multiple systems and formats, with no easy way to make sense of it all. Either way, having the data and using it correctly are two different things.
This is especially complicated if data is coming from all over your organization: HR, tax, benefits, finance, legal, IT, and others must coordinate effectively with each other to pull the right data for the right employees.
Validating your data can prove nearly impossible without a structured strategy for tracking, analysis, and quality assurance.
Reporting to Avoid Penalties
Your organization may be fully ACA compliant, but it’s all too easy to unintentionally report non-compliance and owe penalties that can quickly skyrocket.
Data must be carefully reconciled, recorded, analyzed, and provided to employees (via Form 1095-C) and the IRS (via Form 1094-C) using a series of complex codes. There are more than 50 possible code combinations on lines 14 and 16 of the 1095-C, determined by employee, month and entity, to describe your offers of coverage. Some codes self-report a penalty to the IRS.
As if accidentally self-reporting non-compliance isn’t enough, every late or incorrectly reported form carries up to $250 in penalties.
Let us take the challenge out of ACA. Contact Tax Credit Co. to find out how we can help your organization understand compliance, ensure accurate data, and provide audit-ready reporting before the 2016 deadline.