ACA Employee Data Reporting: How to Avoid Getting in Over Your Head
Complying with the Affordable Care Act (ACA) requires more from organizations than just pulling together relevant employee data and submitting it. That’s because the IRS wants to see a complete picture of each full-time employee’s work history stretching back up to a year – and your existing systems may or may not be tracking it all. This data includes basic information like name, address, and EIN, as well as the calculations that go into determining employment status, and details you may have to piece together after the fact, like leave earned and leave taken.
Beyond that, overlapping HR, benefits, and payroll databases may contain conflicts you need to resolve, and any changes during the year – like a move or a promotion – may further muddy the waters. For instance, you may have someone who’s entered by her legal first name in a benefits or payroll database, but uses her everyday nickname with HR. Or an employee may have different addresses in different systems because of a move.
Resolving these conflicts up front is critical, because beyond saving you the headache of having to file corrections with the IRS, it can also prevent you from falling into noncompliance. For example, using an old address may mean you make an error in your safe-harbor calculations for that employee, or send required payee statements to the wrong place. Failing to record a promotion or a change from seasonal to full-time status may mean you also fail to offer coverage to an eligible employee. And all of these errors are associated with fines.
That’s why you need not only a solid understanding of the law, but also of the details behind IRS reporting requirements.
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Categorized in: ACA