Monthly Archives: January 2016

CPAs Performing ACA Reporting … Pay Attention to HIPAA Compliance

In working with CPAs across the county, we have found that the overwhelming majority have not been aware that in order to perform Affordable Care Act (ACA) reporting on forms 1095-B and 1095-B for their clients that they must be HIPAA Compliant.  The confusion is understandable, since this likely is the first time they have ever really dealt with Protected Health Information (PHI).  Employee benefit brokers typically work with PHI on a daily basis every day, and thus are familiar with the requirements, such as entering into a business associate agreement with your client.  However on the whole, we are finding out that CPAs are not aware.

This link here from will be helpful to anyone who is looking to further research this issue regarding how business associate agreements work.  In addition, you will see CPA firms listed as examples of business associates.

Well what about employment and payroll records?  The immediate defense of CPAs normally is that they already are working with this type of information and are not required to be HIPAA compliant.  However, it is important to understand that HIPAA Privacy rules exclude these type of records that CPAs often work with. When it comes to working with PHI for this Affordable Care Act reporting though, this is a different story.

This link is a blog article from the American Institute of CPAs that you might find helpful on this topic. (link here)

What is PHI?

In terms of ACA reporting, whoever performs this reporting will indeed become in possession of PHI when they receive medical plan participants enrollment dates, dis-enrollment dates and social security numbers.  Since the information that is being received is connected with a health plan, this information becomes PHI.  Anytime you come into contact with PHI, you must enter into a business associate agreement and take certain other steps to maintain HIPAA compliance.

What is required of CPAs to be HIPAA compliant?

We would strongly suggest you speak with an attorney (as we do not give legal advice).  When you speak with an attorney, you will likely find the following items below as necessary:

  • Entering into a business associate agreement with clients
  • HIPAA training of all staff
  • Internal HIPAA security measures to ensure compliance with HITECH Regulations
  • Ensuring the servers and other computers in which you hold PHI are encrypted, fire walled, have server logs and audits, etc.
  • Rules on how data breaches are handled and communicated
  • Normally it is recommended to have Cyber Security insurance policies in place
  • It is also a very good idea to ensure your E&O insurance will cover you for these activities

Again, don’t take our word for it … definitely speak with an attorney.  And if we can help you, please let us know.  We partner with CPAs across the country to assist them with delivering an ACA reporting solution to their clients.

ACA Reporting Delay: Impact On Individual Tax Filings

One of the most common questions we are receiving is regarding the impact to employees filing their own personal taxes now that there has been an extension of time allowing employers and organizations until the end of March 2016 to supply forms 1095-B and 1095-C to their employees.  The concern rises when employers consider how employees can complete their normal tax filings without being provided the forms showing their health coverage for the year.

The IRS recently released some guidance to assist us with understanding this topic.  In their guidance they have said, “Due to these [ACA reporting] extensions, some individual taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2015 tax return. While the information on these forms may assist in preparing a return, they are not required. Like last year, taxpayers can prepare and file their returns using other information about their health insurance. Individuals do not have to wait for their Form 1095-B or 1095-C in order to file.

The IRS has not extended the due dates for Health Insurance Marketplaces to issue Form 1095-A. Individuals who enrolled for coverage through the Marketplace should receive Form 1095-A by February 1, 2016 and should wait to file their returns until the receive their Form 1095-A.”

The IRS has also said that individuals can rely on information from their employer or provider without having to amend their return later.

So what is the overall actual impact?  

Since the forms 1095-B and 1095-C are informational returns, much like 1099’s and W-2’s, the extended filing deadline for employers will not affect companies income tax returns.  Also, it would seem to reason that individuals will not have to file amended returns if they have wrong (or no) information from their employers due to the extensions.  Likely, the IRS will punt on the individual mandate penalties for this year in some cases.

Specifically, on the form 1040 of individuals, there is a line 61 & 62 (shown below) and they will need to complete as part of filing their taxes.