Technology upgrades to the Affordable Care Act (ACA) reporting process improved the user experience for e-filers in 2018, but the system is far from perfect. “The complexity and nuances of the employer mandate still pose unique challenges for PEOs, especially when supporting a diverse client set,” says Chris Babigian, a Product Manager at PrismHR who specializes in compliance.
Let’s take a look at the good, bad and ugly of the updated process.
The e-filing system, AIR (short for Affordable Care Act Information Returns Program), has made usability enhancements and accelerated the registration process. Notably, the IRS now sends you a required PIN electronically, replacing a snail mail method that took as long as two weeks. The responsiveness of the AIR system has also been vastly improved, processing submissions in minutes instead of hours.
A failure to match an employee’s last name and Social Security number is the most common error that PEOs encounter in the AIR system (and one that can result in penalty). Prefixed and “double-barreled” surnames are often the culprits (e.g., De La Cruz, Lee-Jenkins). While resolving these issues isn’t particularly difficult, it introduces delays during the filing process. One resource that can help is the Social Security Administration (SSA) Name/SSN Verification Service.
Full-time and total employee counts reported on forms 1094 and 1095 are causing headaches for some PEOs as they manage inconsistent time bases for measurement between the requirements on each form. To further complicate matters, on the 1095, “only an offer of coverage or enrollment for an entire month counts as an offer or enrollment for the applicable month.” With three time standards in play, it’s no wonder some e-filers are left scratching their heads (and reaching for the aspirin).
What You Can Expect for 2018 Filing
If the trend continues, the IRS will post forms, instructions, and eFile specification updates for 2018 in August or September. While the IRS has not yet indicated any significant changes, small but important modifications (and points of clarification) have occurred each of the past two years.
How to best prepare for what’s to come?
Many organizations perform self audits during the course of the year and work with their clients to ensure 1095 and 1094 mid-year results are accurate. Additionally, any organizations new to ACA year-end processing in PrismHR are encouraged to familiarize themselves with the platform’s functionality and coding logic before January. Investing time in audits and building system knowledge will pay off with greater certainty in your data and a better experience during the filing process.
ACA Reporting Resources
- PrismHR Affordable Care Act solutions
- ACA Information Center for Applicable Large Employers (ALEs)
- Information Reporting by Applicable Large Employers
- Affordable Care Act Information Returns (AIR) Program
- Q&A on Reporting of Offers of Health Insurance Coverage by Employers
This post is inspired by “Affordable Care Act E-Filing” by Chris Babigian, Product Manager at PrismHR, which appears in the June/July 2018 issue of NAPEO’s PEO Insider Magazine.