For HR professionals, the next big Affordable Care Act (ACA) compliance hurdle is on the horizon for 2015. Effective next year, employers subject to the employer shared responsibility mandate (a.k.a. “Play or Pay”) will be required to comply with the reporting requirement component of the “ACA compliance trifecta.” 

Don’t Rest on Your Laurels - More ACA Compliance in 2015

ACA Compliance

For HR professionals, the next big Affordable Care Act (ACA) compliance hurdle is on the horizon for 2015. Effective next year, employers subject to the employer shared responsibility mandate (a.k.a. “Play or Pay”) will be required to comply with the reporting requirement component of the “ACA compliance trifecta.”

Jim O’Connell, Ceridian Washington insider and executive consultant, explains, “Employer reporting represents one of the three pillars of ACA compliance – along with the mandate to offer affordable and minimum value coverage and to determine full-time employee status.”

No turning back on the health care law

On July 24, 2014, the Internal Revenue Service (IRS) released draft forms 1094-B, 1094-C, 1095-B and 1095-C, which are samples of the forms employers will use to comply with the section 6055 and 6056 reporting requirements mandated by the ACA. The health care law requires employers to annually report details of employer-sponsored health coverage to the IRS and to their full-time employees.

According to O’Connell, the recent publication of draft forms indicates that the IRS intends to implement and enforce the ACA reporting requirement. It is unlikely there will be another delay.

MagnifyPrepare now for 2015-2016 compliance

While employers will file their first information returns under the ACA reporting requirement in early 2016, employers need to begin accurately collecting coverage data in 2015. By giving employers a heads-up about the specific information they need to collect and report to the government, the IRS is offering employers time to implement the right processes and tools for data collection starting January 1, 2015.

To enforce the “Play or Pay” mandate, the IRS will rely on employers’ Section 6055 and 6056 reports. Section 6055 requires sponsors of self-insured group health plans and insurance issuers to report on individual enrollments in minimum essential health coverage.

Section 6056 requires employers subject to the “Play or Pay” mandate to report on health coverage offered to full-time employees and their dependents, including information such as each full-time employee’s dollar share of the lowest cost monthly premium for self-only coverage. Sponsors of self-insured health plans are subject to both reporting rules.

ColumnsImportant compliance action steps

Employers need to make sure they have effective HCM technology that will enable them to collect data and populate the fields in Forms 1094-B, 1094-C, 1095-B and 1095-C.

In order to best prepare for ACA compliance, below are five action steps you should be taking now:

  • Review the draft IRS forms and become familiar with the new reporting requirements. The IRS is expected to release draft instructions later this summer.
  • Ensure that you have the necessary procedures and technology in place to collect data on employee’s full-time or part-time status
  • Verify that you have the necessary procedures and technology to collect health coverage and health plan data
  • Work with your HCM vendor to gain full understanding of your tool’s reporting capabilities and ask any questions
  • Communicate clearly and often to employees about their health benefits plan

O’Connell says, “The Section 6055 and 6056 health coverage reporting requirement is one of the most challenging compliance mandates the ACA imposes on employers. The July 24 publication of draft IRS forms means it is now time for employers to put in place the needed HCM technology to streamline reporting.”

For more information:

  • Learn more about Ceridian Dayforce HCM
  • Read our eBook: Dayforce HCM Compliance. Don’t guess, Know
  • Stay up-to-date on ACA compliance by reading Jim’s HR Legislation Blog