Most Employers Unsure of Best Way to Comply with Upcoming Reporting Requirements
A large percentage of employers still have not decided how they are going to comply with the Patient Protection and Affordable Care Act’s (ACA) information reporting requirements, according to speakers at a recent Mercer webcast entitled ACA Play-Or-Pay and Minimum Essential Coverage (MEC) Reporting. Employers will be required to do either Sec. 6055 or Sec. 6056 (and in some cases, both) reporting for the 2015 plan year. While the forms are not due to the IRS until early 2016, it is important for employers to determine the processes they want to use to comply with these provisions now.
Sec. 6055 requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs, and other entities that provide minimum essential coverage to file annual returns reporting information for each individual for whom such coverage is provided. Sec. 6056 requires applicable large employers—generally employers with at least 50 full-time employees, including full-time equivalent employees—to file information returns reporting the terms and conditions of the health care coverage, if any, provided to full-time employees.
According to Tracy Watts, senior partner at Mercer, when these requirements were first announced, most employers believed that they would meet the ACA’s information reporting requirements in-house, but “as we’ve learned more and more about the reporting requirements, this has changed.” Now, Watts noted that more employers are unsure as to how they will comply with the requirements, and another “substantial percentage” of employers believe they will use a third party to meet these requirements.
During the webinar, Watts outlined five steps to compliance:
(1) Review required data elements. The first step is to review the data needed to fill out these forms. Watts indicated that at the beginning of this process, it is important to think about what departments/divisions in your company that might be able to contribute towards compliance. “You shouldn’t feel that this is something that the HR/benefits department in your company has to go at alone,” she noted. Some departments with a vested interest in this would be the payroll department (or payroll vendor), the finance department, and in-house counsel.
(2) Locate your data. The experts at Mercer “think that [locating the necessary data] is the challenging part of the reporting requirements because it’s not likely that all of the data elements you need are going to be housed in the same place,” said Watts. For example, an employers’ health plan administrator will have to provide information on actual enrollment and dependent data, and the payroll vendor will have to provide information about full-time status and the affordability of the plans offered to employees.
(3) Determine your vendor capabilities. There are some important questions you need to ask, according to Watts: Is your payroll vendor offering a solution to help complete the required forms? Do you want to buy the reporting support only or do you want a bundled solution, which would include hour tracking as well as reporting? Or do you want to forgo the use of a vendor and do this in-house?
(4) Finalize responsibilities. The next step is to actually decide who will: aggregate your data, complete the forms, deliver the individual statements and transmit the data to the IRS. Also, employers might want to decide who will be responsible for responding to the Health Insurance Exchange notifications, Watts said.
(5) Begin tracking. “And get ready to report,” Watts concluded.
Reposted with permission from Wolters Kluwer.
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