2015 ACA Reporting Results
Mandated reporting of qualified and affordable coverage under the Affordable Care Act (ACA) has been completed as of June 30, 2016 for the first time. The 1095 forms were due by March 31st, while the 1094 forms were due by June 30th. The Federal government should now know who had coverage and, for employers with more than 50 FTEs, if it was affordable. This being the first time reporting of this kind has ever been done, we learned a lot from the process. The biggest lesson: expect issues!
Other federal tax forms, like the 1040 and W-2, require a correct Social Security Number to apply the reporting of information. If the name or address isn’t an exact match with previous information the IRS still processes the document. However, the ACA reporting forms 1094 and 1095 require exact matches of Social Security Number and name with what was submitted on the employees most recent IRS 1040. If the Social Security Number doesn’t match exactly, the form is kicked back to the employer, or reporting agency, requiring it be corrected with matching information.
Of course, the IRS doesn’t provide an exact indication of what doesn’t match. It is the employer’s responsibility to find and correct the errant information and resubmit to the IRS. An example of errors we had to correct were as simple as the employer providing a W-2 for employee Robert Smith; but Robert files his taxes as Robert A. Smith. Or, divorcee Jane Doe still file’s her taxes under her ex-married name, Jane Smith. The difficulty for the employer comes in the need to contact the employee (sometimes ex-employee) to verify what they submitted their 1040 under.
Although there are no penalties in the 2015 reporting year as long as the employer makes a good faith effort to complete the reporting, that good faith effort requires that corrections be made. Plus, correcting the information this year puts the employer in a better position next year to submit cleaner information.
From our experience you should expect some kickbacks for incorrect data. For an employer with just over 100 enrolled employees we had 3 come back. For a group with over 1100 we had 41. Not a daunting task to clean up, but proof that just about every group will have some.
Having issues with ACA reporting? Give us a call to review your options.