Tag Archives: Payroll Companies

Payroll Vendor Doing ACA Reporting … MUST be HIPAA Compliant

For payroll companies performing ACA reporting, we are increasingly finding that they forgot one very important detail … HIPAA and HITECH Compliance.

The reason most payroll companies forget about this detail is that they normally work with employee specific information regarding payroll records.  For payroll record specific information, HIPAA privacy rules have an exception that allow for the data to not be considered Protected Health Information (PHI).

When it comes to ACA Reporting however, there is no similar exception.


The information that is necessary to complete ACA reporting (list here)  contains employee Social Security Numbers that are connected with medical plan enrollment details.  For this reason, the data necessary to complete ACA Reporting must include PHI and thus the HIPAA and HITECH Compliance rules come into effect.

These rules require many various things, including the following:

  • Employers must enter into a Business Associate Agreement with any vendor they share PHI to in order to complete ACA reporting.
  • Once the vendor (payroll company in this case) comes into contact with the PHI, they have responsibilities to encrypt and safeguard this information.
  • Any communication that includes PHI (emails, etc) must be sent encrypted in order to ensure compliance
  • Once the payroll company receives the data, they must maintain all other HIPAA and HITECH compliance items regarding how the data is accessed and stored.

….So one quick question you can ask yourself is, “Did I sign a Business Associate Agreement with the payroll company I hired to do my Affordable Care Act Reporting?”.  If the answer to that is No, then you might have a problem.


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


If you are curious how we handle HIPAA Compliance for our clients, you can learn more here.

Is ACA Reporting More Payroll or Benefits Related?

A common question in the marketplace is ‘what exact information is necessary to complete the Affordable Care Act (ACA) reporting’, which is required for employers for the first time regarding the 2015 calendar year.  To assist, we have created a list below of the types of data necessary as well as who will likely have that information.  

Many employers and benefit brokers originally made the assumption that ACA reporting would best be performed as an additional function of a company’s payroll provider.  However, now as the time comes to actually perform the reporting they understand that ACA reporting requires much more benefits information than payroll.  

Basic information to the company whom both the Benefit Broker & Payroll provider have
·         Company name, address, contact information and EIN
 
Payroll Information / Payroll Provider
·         Number of part time and full time employees
·         Payroll employee names, SSN, address, hire and termination dates
 
Benefits Information / Benefits Provider
·         Is this your first year offering medical coverage?
·         Renewal dates
·         Type of plan funding structure (fully insured, self insured, multi employer plans)
·         Waiting periods and if there are multiple waiting periods for different employee classes
·         Did your medical plans offer minimum essential coverage?  When?
·         Did your medical plans offer minimum value coverage?  When?
·         Full detailed understanding of 4980H Transitional Relief
·         Medical plan start and end dates
·         Medical plan offerings to various classes of employees, and costs of these plans
·         Eligibility by employee class for Federal Poverty Line safe harbor
·         Eligibility by employee class for Rate of Pay Safe Harbor
·         Eligibility by employee class for W2 safe harbor
·         Medical plan employee contributions by month and class
·         Plan offering Criteria, Qualifying offer Method, Qualifying offer Method with Transitional Relief, 98% offer method
·         Was an HRA offered?  Was it integrated with medical plan enrollment?
·         Certifications of unchanging workforce size for plan purposes as well as consistent employer contributions.
·         Months Offering MEC coverage to 70% of FT Employees
·         Full information on employees including name, SSN, DOB and address
·         Full information on dependents of employees including name, SSN, DOB and address
·         Medical plan coverage start and end dates for all persons on the medical plan
·         Medical plan offering details including start and end dates by employee class
·         Designated governmental entity information
·         Aggregated group information, and full details on control groups
 

Payroll Vendor ACA Reporting Causing More Benefit Broker Work …

If you are a benefit broker you might be in for a special 2015 Christmas surprise but not in a good way.  A question for you:

  • Did any of your clients use their payroll vendor to do this reporting? (answer is usually yes)
  • Have you heard from these clients yet? (answer is usually no)

You need to know that you will hear from them very soon. Why? The reason is twofold.

First, the payroll vendor almost never has all of the information necessary to complete the reporting from a medical plan standpoint.  Instead, they require their clients to enter that data and do not provide much support to assist them (unless you consider forwarding along the IRS regulations as ‘support’).  The clients of course do not know how this all works…

Surprise! You as a broker end up doing the work to help your clients while the payroll vendor receives their compensation for ‘doing’ the ACA reporting.

Secondly, with many payroll vendors they require the employer to actually determine and enter the codes in lines 14 and 16 of form 1095-C. The employer of course thinks that they have paid someone else to do this reporting, so what are they doing? You guessed it – they are sending it back to their broker to do.

This is creating major issues for brokers because often times they made the referral for the payroll company to perform this reporting not understanding that the reporting requires much more benefits information that it does payroll information.  Adding additional pressure, it is now late December 2015 and there are very few vendors in the marketplace still taking clients.


So what can you do about it?

  1. Determine which clients are using payroll vendors and call them immediately to make sure they have begun the process and understand everything that is required.
  2. Evaluate where you are in terms of your clients ….. and what will be needed to get their required information completed.

Need help?  Contact us at customer support via the link above OR learn more about our ACA consulting services for groups have had had their ACA reporting completed by another vendor, by contacting support.