ACA Reporting to Become Your Broker?

With the rise of employee benefit brokerage firms having full service HR administration capabilities (such as Zenefits), it shouldn’t be surprising that these firms are using ACA reporting as a wedge to become the broker on all lines of business for large employers.  We speak with dozens of benefit brokers every week, and in the past 30 days this sales pitch has picked up significant steam.  Recently we interviewed one of the senior most employee benefit experts in the country to see what his thoughts were on this trend.

“It was just a matter of time.  The marketplace, and many benefit brokers, are really confused when it comes to ACA reporting.  In fact, there are still brokers out there who believe that fully insured large groups do not even need to do anything.  It should be no surprise that some firms are making a lot of headway in growing their businesses by using ACA reporting.  The opportunity for benefit brokers today is greater than I have ever seen it.  We all knew that the Affordable Care Act would bring about a consolidating of employee benefit broker firms, and I believe we are beginning to see this trend as the smaller firms are having a hard time keeping up.”

We are also seeing payroll companies and PEO’s are also using ACA reporting as a wedge between the incumbent benefit broker and their clients as well.  As a benefit broker in today’s marketplace, you simply cannot afford to be non-educated on this topic.  If you are willing to go just a little bit further, then it actually would be quite a catalyst to grow your business.

Need to Learn ACA Reporting Quickly?

This 45 minute ‘non-attorney’ webinar will help you know exactly what you need to know.  The last 15 minutes covers our most frequently asked questions.


Evaluating ACA 6056 Employer Reporting Software?

Evaluating ACA 6056 Employer Reporting Software?

Employers & Benefit Brokers Evaluating ACA 6056 Reporting Software

If you are a large employer or employee benefit broker, chances are you have spent a lot of time trying to determine the best ACA 6056 reporting and compliance solution for your clients.  At ACA Reporting Service, we do not sell software – but rather full service reporting.  However, we have researched almost a dozen different ACA employer reporting and compliance vendors and we thought we would pass along what we learned.

Beginning Questions To Ask Yourself

As an employer or benefit broker, this is how the ACA reporting question breaks down for you.

1).  Some employers will have their online enrollment (benefits administration) and payroll with the same vendor.  In those cases, as long as the client is willing to pay for it, it will likely make sense to just perform the required ACA reporting of IRS forms 1094 and 1095 with that vendor.

2).  Some employers will not have an outside benefits administration or payroll vendor.  They do everything in-house.  For these employers, there is going to be a lot of ACA work to be done and obviously you will need a stand alone solution.

3).  Finally, you have some employers who have payroll and benefits administration with different vendors.  This would include the scenario where one of these functions is performed in house.  In these cases you will either need to consolidate both payroll and benefit plan elections with one vendor, or you will need a stand alone solution.

Basic Conclusion:  If you are an employee benefit broker with various types of employer clients, we don’t see a scenario where you can get away with not having a stand alone ACA reporting solution to help your clients meet their ACA Reporting Requirements.


What do you need to know in evaluating ACA stand alone software vendors?  Things to keep in mind as an employee benefit broker if you want to do this on your own.

Employee Benefit Brokers, Ask Yourself These ACA Reporting and Compliance Questions

1).  Security?  What if all of the social security numbers of your client’s employees was stolen?  Can you imagine the fall out?  Many of the systems we reviewed were severely lacking in terms of security.  What level of encryption is being used for the data?

2).  Branded to your company?  Many different ACA reporting vendors offer the ability to brand a portal to your company that your employer clients will be able to login from.

3).  Is the system mainly a benefits administration system?  The differences in these systems can be extreme – from very low level to incredibly high level.  Will this add additional costs for the ACA reporting module?  Also with many benefits administration systems, there are additional charges for EDI (electronic data interface – where election data is sent to insurance carriers).  Will additional fees apply with this new ACA reporting?

4).  Is the ACA reporting solution even built yet?  Many of the ACA reporting module demo’s we sat in on were from vendors who do not even have the software built yet.

5).  How long will your data be stored?  The IRS has said that audits will begin starting in about 18 from months from the filing date, and that can last for 7 years total.  If you do not have a methodology to get back to your data at the time of inquiry, you are stuck.

6).  Is your vendor set up to file with the IRS?  Did they just lie to you and say yes to that question?  As of the writing of this blog, no one is set up to file with the IRS electronically (efile) for forms 1094 and 1095.  The IRS has literally just issued the guidelines to begin getting started with this.

7).  Variable hour tracking?  Do you need variable hour tracking to determine eligibility?  For many employers a simple spreadsheet will do the trick.  Many vendors have quite robust capabilities in this area, and for some employers this will definitely make sense.

8).   The ‘Gotcha Moment’.  This comes at the end of a great presentation where they tell you there is an additional $3 to $5 per employee to file the forms with the IRS.  Generally this will make the costs of this solution not competitive.

9).  ROBUST ACA LOGIC.  We cannot tell you how important this is!  If you have spent as much time looking at these forms as we have (especially in terms of form 1095c lines 14, 15 and 16) you will know that performing this reporting is MUCH MORE than just uploading a spreadsheet.  The codes for these lines are based upon logic.  Most systems do not have this logic built into their system, but rather it will be up to you as an employer or benefit broker to figure this out.  For most employee benefit agencies, you can count on this little ‘bug’ shutting down your operations in January.

What if you decide to just file them incorrectly?  When your largest client has 100 employees bring them letters from the IRS, you will then realized this was a very bad idea.

Also, without robust logic built into the system there will be no accommodation for situations such as someone terminating in November/December and then electing COBRA in January.  The codes for these situations are different.

10).  Are forms stored for future access and corrections?  Bottom line – there is going to be issues with the reporting from time to time.  Do you have the ability to go back into the system and create a new/corrected 1094 or 1095 form on behalf of the employee?  Many systems that rely solely on a census upload would require you to basically start over in order to make this one fix.  OR, your staff can just manually create one in .pdf which will take a lot of time.

11).  Do you have to pay for the whole system up front, or are there monthly options?  Do you need to commit to multiple years with the software vendor?  Do you have to pay onging for the solution or only once?  Are there implementation costs?  Are there separate fees for the IRS form file reporting and all other functions in the system?

12).  Can the employee elections be uploaded via census, or do you need to type it all in?

13).  Will they have adequate customer support between January 1st and January 31st so that you can KNOW you will be able to get this all done?

14).  Do you want to just let the payroll vendor do this for your client?  Do you really want to recommend your client that they should have another function performed by someone who wants nothing more than to take your business away from you?

. . . OK, that is enough!  We hope you find this helpful.  In the case that you would like someone to be fully hands on and provide great service to get all of this reporting done, we will be here to help!

 

 

Municipalities, School Districts, Governmental Entities – ACA Reporting

Municipalities, School Districts, Governmental Entities – ACA Reporting

Across the country municipal government, cities, towns and school districts are beginning to learn their responsibilities for Affordable Care Act (ACA) reporting to the IRS under Internal Revenue Code 6055 and 6056.  We speak to these municipal groups every day, and this often is a complete shock to them.  What do you mean I have a self funded plan?

For municipal groups and school districts under the state health plan in their given state, they are being notified that they are actually on a self funded plan.  The reason for this is the manner in which the states generally arrange these plans and file with their department of insurance.  Since these plans are self funded, they have very specific reporting requirements under the ACA.  The largest shock for these groups is that the states are not performing the reporting on their behalf, but rather it is the responsibility of each individual municipality, school district and other governmental entity.

Due to these facts, it is imperative that these organizations understand what their requirements are, preferably in a simple and easy manner.  To assist with the learning curve, we have recorded a free webinar that can be accessed on demand.  The goal of this webinar is to tell you only what you need to know, and to do this in less than 45 minutes.  The feedback for this session has been excellent, so we hope you find it helpful.  Simply press play below to get started.


Session Overview Notes:

  • Overall Presentation 40 minutes (the last 10 minutes covered most frequently asked questions)
  • Session was a quick (non-attorney) overview of ACA Reporting
  • What did the Affordable Care Act Accomplish?
    • Individual mandate to have health insurance  (IRS 6055)
    • Employer pay or play rules (IRS 6056)
  • How will the IRS ensure individual and employer compliance?
  • What are employers options when it comes to ACA Reporting

All Large Employers MUST Complete ACA Reporting (Even Fully Insured Groups)

All Large Employers MUST Complete ACA Reporting (Even Fully Insured Groups)

This comes as a surprise to many, but YES – if you are an employer with 50+ employees (or full time equivalent employees), you must complete ACA Reporting to the IRS (forms 1094 and 1095).

But I’m Fully Insured . . . My insurance carrier will take care of this right?   No!

You might have thought that your insurance carrier was going to take care of this, but they only report the portion that they are required to report as an insurance carrier.  Employers still have additional responsibilities.  


The easiest way to think about this is by considering what the Affordable Care Act accomplished:

  • Individual Mandate – all US citizens must now have health insurance or pay a penalty
  • Employer Mandate – all large employers (50+ employees) must offer coverage and that coverage must be affordable
  • The IRS is in charge of making sure these things happen.

So how does the IRS make sure that an individual did have health insurance and doesn’t owe an individual tax penalty?

This is accomplished through the IRS receiving specific forms from the various places that an individual could have coverage:

  • The exchanges send the IRS the ‘A’ Forms (1095A)
  • The insurance carriers send the ‘B’ Forms (1095B)
  • And self insured employers must report everyone covered under their plan for the year using the ‘C’ Forms (part 3 of 1095C)

How does the IRS make sure each large employer (a) offered coverage and (b) that the coverage was affordable?

This is accomplished through the IRS receiving a completed form 1095 by ALL LARGE EMPLOYERS.  Specifically, part 2 of form 1095C is used to accomplish this task.

So as you can see this is not something that will be fulfilled by insurance carriers, and the penalties for not filing are substantial.  (IRS Fines)

Have questions?  Contact us from the support tab.  Thanks!