Ensuring ACA End of Year Filing Success: Best Practices for Applicable Large Employers (ALEs)
While the April 1, 2024, Affordable Care Act federal reporting deadline is still months away, an ounce of prevention is worth a pound of cure, especially for Applicable Large Employers (ALEs) who are notorious for waiting until Midnight on the night of the filing deadline.
For ALEs, now is not the time to relax. Your organization should be gathering all 2023 employee data in preparation for next year’s reporting. With the recent allocation of $80+ billion to the IRS over the next 10 years, it is anticipated that the enhancements made to their operations with this funding will lead to auditing and penalizing for anything deemed non-compliant, including data accuracy.
IRS Dual Penalties for Inaccurate Reporting
While the reporting deadline is still months away, we are in the thick of ACA reporting season. Therefore, you must prepare now, and understand that inaccurate reporting is subject to hefty fines and penalties under the Internal Revenue Service (IRS). A dual penalty, for example, means you will receive one penalty for filing to the IRS and another for distributing the incorrect form.
Penalties for inaccuracies on 1095-C forms are the same for filing and distributing, with a fee of $290 for each inaccurate form, capped at $3,532,500.00 annually. However, these penalties are assessed separately, meaning the IRS may charge penalties for a maximum of 12,181 forms, totaling $7,065,000.
Understanding the costly impact of inaccurate reporting makes reviewing your forms all the more important
now. Getting ahead of these costly mistakes will ensure that you kick-start the new year on the right track. Therefore, double-check and correct any form errors, including name and social security number (SSN) mismatches.
Reviewing and Correcting ACA Forms 1094-C, 1095-B, and 1095-C
When reviewing your 1094-C, 1095-B, and 1095-C forms, be sure to double-check that the information is correct in the following areas:
1094-C Correctable Fields:
- ALE Member or Designated Government Entity (Name and/or EIN)
- Total number of Forms 1095-C filed by and/or on behalf of ALE Member
- Aggregated ALE Group Membership
- Certifications of Eligibility
- Minimum Essential Coverage Offer Indicator
- Section 4980H Full-Time Employee Count for ALE Member
- Aggregated Group Indicator
- Other ALE Members of Aggregated ALE Group (Name and/or EIN)
1095-B Correctable Fields:
- Part I – Name, SSN, DOB, Address, City, State, Zip, Origin of the Health Coverage
- Part II – Employer Name, EIN, Employer Address, City, State, Zip
- Part III – Issuer or Other Coverage Provider’s Name, EIN, Employer Address, City, State, Zip
- Part IV – the coverage indicators
1095-C Correctable Fields:
- Part I – Employee’s and ALE’s Name, SSN, EIN, Address, City, State, Zip
- Part II - Indicator Codes for lines 14 and 16, Employee-only contribution amounts, Zip
If you confirm that there are name and SSN errors, immediately make a note for your records and correct the 1095-C form.
Become an ACA Form 1095-C expert with our on-demand webinar, "Deep Dive into ACA Filing Codes." HRlogics’ ACA Customer Support Manager, Kristy Cleveland, discusses common code combinations to be on the lookout for, and how to audit your forms quickly using innovative technology. View the Deep Dive into ACA Filing Codes recording.
Additional Steps to Take Ahead of the April 1st ACA Reporting Deadline
While you still have plenty of time to prepare, don’t procrastinate! There are still many important things you’ll need to take care of ahead of the ACA filing deadline.
Here are the recommended steps to complete:
- Gather data including Census, Plan, Offers, and Payroll.
- Confirm that you have all data from January 1st to the current date.
- Review data for accuracy and upload it into your ACA solution; when using a Third-Party provider.
- Confirm that all edits processed during the previous year’s filings have been permanently changed in your source data, for example, the “*” that caused a rejected status. Confirming these edits to the source data will ensure that your data moving forward is correct.
It is important to note that ALEs should make all corrections before the official deadline of April 1st. Any submission after April 1st will be considered late and subject to late penalties.
Partner with HRlogics for ACA Compliance Confidence
Experienced HR professionals can accidentally make errors, resulting in expensive penalties from the IRS and state agencies. This makes
HRlogics the go-to for thousands of employers seeking ACA compliance expertise for peace of mind. With
HRlogics’ ACA compliance solution, you can achieve ACA reporting compliance through our hands-on approach, or by using our self-service software to precisely manage your Form 1094 and 1095 data. Don’t get complacent, get compliant!
Contact HRlogics today to learn how you can set your company up for compliance success in 2024 and beyond.
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