Filing deadlines for the Affordable Care Act (ACA) approach early in the calendar year, at a time when HR and payroll teams are just wrapping up all of the previous year end tasks while busy starting into the new year initiatives. With limited time and bandwidth, don’t panic HCM users!
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Five key tips to stay calm and methodical while preparing for your organization’s ACA tasks and filings
1. Double-check data accuracy: Ensure employee information and plan selections are up-to-date to avoid costly errors and delays.
a) Open Enrollment Elections: Are enrollment decisions finalized, and has your HCM been updated with all new plan selections and member information?
b) Health Plan Changes: Are all health insurance plans reflecting any changes in coverage, rates, and/or network providers for the upcoming year? Employee elections and cost calculations should be up-to-date.
2. Embrace automation tools in your HCM: Streamline your HCM processes and reporting for submitting timely filings and avoiding failure penalties.
a) Employer Shared Responsibility Payment (Form 1095-C): The deadline to file Form 1095-C with the IRS, reporting health insurance coverage offered to employees, is typically in late February or early March each year.
b) Individual Mandate Reporting (Form 1095-B): Some states still require individual mandate reporting (Form 1095-B) to track health insurance coverage for residents. These deadlines also often fall in February or March as well.
3. Stay informed: Keep yourself updated on any regulation changes or filing requirements to avoid surprises. Furnishing and filing deadlines can move if they would normally fall on a weekend or in a leap year.
a) Employer-Sponsored Health Insurance (ESI) Tax Deduction: Organizations can deduct the cost of employer-sponsored health insurance on their corporate taxes. Ensuring accurate reporting of ESI expenses for maximizing this deduction.
b) Health Insurance Tax Credits: Some employers may qualify for health insurance tax credits under the ACA. Accurately calculating and claiming these credits using your HCM system data can lead to significant tax savings.
c) Regulatory Compliance: ACA regulations and reporting requirements can change year-to-year. Your HCM system updates make sure organizations stay compliant with the latest regulations and avoid potential penalties.
4. Seek support: In addition to the IRS site, reach out to colleagues, forums and HCM services partners. You may uncover additional points to research and get help.
5. As you submit filings, add ACA Tasks to your calendar early next year: Addressing ACA prep time early allows your organization to identify and resolve any issues with your HCM system well before filing deadlines. Be proactive to minimize any last-minute scrambling, and you’ll enjoy a calm and smooth reporting process.
Services partners can play a vital role in streamlining processes like identifying errors throughout the year, and identifying if using measurement groups will work for you. Contact HRMS to ensure the knowledge, time and resources to help you with ACA!
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