ACA Reporting – Early 2016 Progress Report

Over the course of 2015, we consulted with employers of all shapes and sizes with regard to ACA Reporting and helped them explore the various solutions available to them: Payroll/HCM, Benefits Administration, and Stand-alone ACA providers, to name the key players. Now, as we have moved into 2016 and these providers have been actively producing Forms 1094 and 1095, we have begun to see the realities behind what was promised by these vendors throughout 2015. Unfortunately, and in many cases, the results have been less than ideal, scary in certain situations, and humorous in others. Our experience thus far has aligned with the expectations we tried to set with clients throughout 2015. We anticipated some rough waters with this year’s ACA reporting and tried to prepare clients and brokers of this possible outcome. Across the three primary provider groups, here is what we’ve experienced thus far in 2016… – Benefits Administration – As expected, these providers stood the best chance to produce the 1094/1095 forms. Their knowledge and experience with benefits and compliance and the fact that core benefits data is native to their application has allowed them to consistently deliver to clients. Where this provider group has struggled is with variable hour tracking, but that is another topic for another blog. – Stand-alone ACA – These providers generally offer the best and most complete solutions in the market. They have, for the most part, consistently delivered accurate information to their clients and are successfully producing accurate and compliant 1094/1095 forms. Where this group has struggled has been with ingesting all of the data required to produce the forms. There is a mountain of data that is required to produce Forms 1094/1095 and many of these stand-alone companies have struggled to successfully swallow the elephant that is HR/Benefits data. – Payroll/HCM – Candidly, this has been the largest area of struggle. In terms of volume across the industry, they have the lion’s share. However, they rushed to finalize their deliverable, hired thousands of new and inexperienced employees to service their clients, and they have inconsistently delivered. In an effort to maintain some level of sanity, we have actually begun to laugh at some of the advice that these providers have been putting forth to their clients. When you look at their responses through a lens of humor, we’ve found that it actually helps. We thought it might be helpful and maybe a little entertaining to share some of our favorite quotes/guidance/consulting that has been shared by Payroll/HCM vendors over the last few months. We have removed the names of the organizations to protect the (not so) innocent. Enjoy the read. – Offer of Coverage Code – “Our system doesn’t support code 1A, so you’ll have to choose another code.” – Applicable Large Employer – “If the ownership of the other companies in the Aggregated ALE is not exactly the same, you don’t need to include them.” – Certifications of Eligibility – ”Since you are over 100 employees, you don’t qualify for any of the boxes on line 22.” – Alternative Reporting Methods – “If you check 98% Offer Method, you must use Alternative Reporting Method.” – Line 15 Cost – “Enter the full amount paid for coverage by an employee, based on the coverage they elected. If they decline coverage, leave Line 15 blank.” – Database “Do Over” – One of the providers opened up their system, had clients manually adjusting data within the system for over a month, then informed clients they were going to wipe the database clean and ask everyone to start over. I only wish I was kidding here. You can’t make this stuff up. The good news is that the IRS is equally unprepared for ACA, so we anticipate a fair amount of grace being extended with the 2015 form filing.

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