The Affordable Care Act (ACA) introduced new rules for employer-sponsored healthcare plans. These rules include reporting steps that verify coverage details and employee eligibility. One form central to the process is the 1095-C. It summarizes each employee’s coverage status and helps government agencies confirm compliance.
Staying on top of 1095-C requirements can be challenging. It involves tracking hours, verifying offers of coverage, and meeting filing deadlines. Many companies worry about penalty risks and how to collect the right data. Here are some of the common challenges and how to help streamline the process and how Pinnacle Employee Services can help.
What is the 1095-C Form?
The 1095-C is a tax document employers must provide under the ACA. It reports health insurance coverage offered to an employee and helps the IRS confirm compliance with ACA requirements.
Businesses with 50 or more full-time employees must issue the form to employees who worked full-time for at least one month during the tax year. Here is some key information found on the form.
- Offer of Coverage (Line 14): Identifies the type of coverage offered using specific codes, like whether it covered the employee only or included dependents.
- Employee Share of Premium (Line 15): States the employee’s cost for the lowest-priced plan meeting ACA standards.
- Safe Harbor Codes (Line 16): Explains the employer’s compliance with affordability rules and whether any exemptions apply.
The 1095-C is not filed with tax returns but should be kept for reference. Employees use it to confirm coverage when filing taxes or responding to IRS inquiries.
Challenges in ACA Tracking and 1095-C Compliance
Employers face ongoing challenges meeting the ACA reporting requirements. The process involves detailed data collection and accurate reporting. Errors or incomplete information can lead to costly resubmissions or penalties.
Tracking employee eligibility is particularly difficult for businesses with variable-hour workers. Employers must monitor whether employees meet full-time status monthly, accounting for seasonal or fluctuating schedules. This requires careful record-keeping and constant updates to avoid compliance issues.
Frequent regulatory updates add another layer of complexity. Since the ACA’s introduction, new rules and shifting deadlines have required employers to stay informed. Falling behind on the most recent changes can lead to inadvertent non-compliance.
Inaccuracies in 1095-C filings or missed deadlines can result in significant fines, which can add up fast for large organizations managing many employees. Staying on top of these requirements requires time, resources, and attention to detail. Employers must be diligent in adapting to regulations while ensuring data accuracy and timely filings.
Key Steps to Simplify Your 1095-C Process
Navigating the 1095-C reporting process to maintain ACA compliance can be intricate. Ensuring you’re well-informed, organized, and prepared in advance is key. That’s where having a trusted HR compliance expert comes into play—they can help you stay on track and avoid pitfalls.
With the assistance of your compliance partner, follow these key steps to simplify your 1095-C process:
- Stay informed by monitoring IRS updates and subscribing to industry newsletters
- Conduct periodic audits to review ACA-related data, like employee classifications and affordability calculations, to catch and resolve discrepancies early
- Maintain an organized, centralized system for storing employee benefits data and related documentation
- Train HR and payroll staff on ACA compliance processes, defining clear roles to minimize errors and prevent missed steps
- Start the filing process early to reduce last-minute stress and lower the risk of penalties for late submissions
How Pinnacle Employee Services Can Help with ACA Compliance
Pinnacle Employee Services helps simplify ACA compliance for employers by taking on the responsibility of tracking and submission. Our team of specialists helps businesses navigate complex regulations, ensuring accurate tracking and reporting while minimizing administrative burdens. Our services include managing employee data and generating 1095-C forms, reducing the risk of errors and penalties.
We provide flexible, tailored solutions that adapt to the size and needs of each organization. Small businesses benefit from simplified processes, while larger companies gain scalable strategies for managing complex compliance requirements. Beyond services, we offer ongoing support, training, and resources enabling you to remain compliant over time.
Partnering with PES allows you to focus on strategic goals rather than regulatory challenges. This frees up resources and reduces the risk of penalties. Our proactive approach ensures timely and accurate reporting, giving you peace of mind.
By handling the heavy lifting, Pinnacle Employee Services helps you mitigate risks, reduce administrative strain, and focus on growth. Our services create a reliable foundation for businesses to meet regulatory requirements while their business thrives.
Need help with HR compliance? Pinnacle Employee Services can help! We’re here to take care of all your HR needs so you can focus on growing your business. Contact us for your HR Review and Needs Analysis today!