A Common ACA Compliance Challenge—SSN Mismatch Errors
SSN Mismatch Errors
Those who are in any way familiar with ACA forms 1095-C and 1094-C electronic submissions to the Internal Revenue Service (IRS) have faced the challenge of “Social Security Number (SSN) and Name Mismatch” errors. The challenge continues and errors appear to again be very high.
While most struggle to understand why these errors occur and at such a high rate, we are beginning to understand the complexity and difficulty the IRS faces with pulling SSNs into government systems, after reading a recent report from TIGTA (Treasury Inspector General for Tax Administration). https://www.treasury.gov/tigta/auditreports/2018reports/201843022fr.pdf
What’s in the TIGTA Report?
The report notes that, the IRS has 36 systems with differing levels of SSN-to-name checking capabilities. However, the IRS only has deep functional insights into 15 of those 36 systems as it relates to the SSN-to-name matching capabilities. Those of us who work with big data on a daily basis can certainly muster some level of empathy for the complexity of systems that house both names and numbers.
Can I just ignore these errors?
Regardless of the desire to look past errors generated by such a system, the errors and error codes should not be ignored. A SSN-to-name mismatch error does carry a potential penalty for being incorrect if the IRS can show willful neglect. The good news is that the IRS has again this year put in place “Good Faith”, which means that as long as the large employer can show effort in working these errors, can document their efforts, the IRS should (subject to the discretion of the auditor) look past such penalties.
How will I know if my company has such an error?
If the IRS acknowledges a SSN-to-name mismatch in your filing, it will most likely come in the form of a 972CG letter. This is different from the 226J letter that notifies employers of Employer-Shared Responsibility Payments. The process for responding to 226J is different than responding to 972CG. Our recent blog, ACA Penalties Keep Rolling In, provides insights into letter 226J.
Where can I go to learn more?
The IRS has compiled a regulations and requirements document to help employers avoid these errors: https://www.irs.gov/pub/irs-pdf/p1586.pdf. In summary, it offers a three-solicitation rule over a period of a couple of years. First solicitation is assumed at the time of enrollment, or as part of the open enrollment period for employers to capture a correct SSN and Name for the employee and their dependents. If the IRS flags a SSN-to-name mismatch, then the employer should re-check with the employee and give them an opportunity to update their systems for future tax years. That extends to the employer’s ACA solution provider. In some cases, if the employee or dependents receiving the SSN-to-name mismatch error have changed their name, then it is imperative that the employee or guardian over the dependent process the name change with the Social Security Administration (SSA).
At Tango Health we work with our customers to correct all errors, including SSN mismatches as part of our monthly process. We believe in a year-round approach to keeping clients compliant and on track with ACA reporting. Our fully-outsourced ACA compliance solution is powered by proprietary, secure software and delivered by our expert services team. If your current vendor is falling short or your contact is up, we’d love to help. Learn more about our solution at tangohealth.com/aca.
Categorized in: ACA