ACA Reporting Requirements


Starting Jan 2016 many organizations will be required to begin providing the IRS with new reports based on the ACA (Affordable Care Act), aka Obamacare.

The penalty for non-reporting is significant. Depending on the situation the IRS penalty ranges from $173 to $260 per employee per month so it is imperative that the ACA reporting is done and done timely.

The reports, while filed in Jan 2016, actually report on your employees starting in Jan 2015. The new ACA reporting requirements apply to organizations with 50 or more employees. For each employee a separate 1095C must be filed. The 1095C includes information on the specific employee, that employees dependents covered by insurance and monthly data for each month of the preceding year. An organization with 300 employees may need to provide a 1095C for each of the 300 employees.

Preparing the ACA reports requires data which may already be captured in a payroll or HR system. However some needed data may not currently be captured, which may mean building internal routines to capture the data. In addition, source data needs to be retained in order to support the reports filed if/when an audit is initiated by the IRS. Software version updates, report configuration changes, and in some cases new software may be needed to handle these new reporting requirements.

For instance, employers who fall below—but near—the 50 employee threshold who have historically paid employees on a salaried basis, may find themselves needing to implement new time tracking software to substantiate their exemption from providing qualifying coverage. More commonly, employers may simply want to have software vendors configure changes that help to generate the required reporting as efficiently as possible.

To see a list of ACA reporting data by software module, check out “ACA Implements New Reporting Requirements that May Result in Penalties

Required ACA reporting data, by software module

Reporting item Reason for requirement Software module data source
Employee W-2 wage data To demonstrate the insurance qualifies as “affordable” based on employee compensation Payroll
Employee insurance premium information To document that the insurance offered to employees qualifies as “affordable” based on employee paid costs Benefits admini-stration
Employee hours of service To determine Applicable Large Employer (ALE) status based on employee hours worked and per employee coverage requirements Time and attendance
Employee insurance coverage dates To verify the satisfaction of employee insurance coverage based on employee service dates Benefits admini- stration

About The Author

Adam Bluemner is the Managing Editor for Find Accounting Software, a service providing free software selection assistance.  Over the last decade Adam has spoken with thousands of companies, helping them achieve business success through intelligent software investment.  Adam writes extensively on ERP and business software.

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