When signed into law in 2010, the Affordable Care Act (ACA) forever changed the landscape of employee benefits administration. With the introduction of the ACA came reporting requirements. If an organization was deemed an Applicable Large Employer (ALE) or offered self-funded health plans, they now had to not only offer affordable health care but meet the reporting requirements that come with compliance. This is yet another headache for already overworked HR teams.
Ask HR professionals about ACA reporting — many will tell you it's a daunting task. That's because reporting requirements leave no room for error. Even just one small error, if not corrected, can quickly add up to substantial costs. On top of that, ACA reporting is very time-consuming, which weighs heavily on HR teams, especially during busy Open Enrollment (OE) seasons.
Recommended For You
The challenges of ACA reporting
ACA reporting is a challenge because there's multiple moving parts, each with their own set of complications. Below are common challenges that ACA reporting presents:
Gathering data
Employers risk facing penalties for inaccurate data. Ensuring that all information such as employee hours, eligibility, and coverage details is accurate quickly becomes a cumbersome, time-consuming task. Not to mention prone to human error.
Complex compliance rules
ACA rules include detailed eligibility criteria, affordability standards, and other coverage requirements. Navigating these rules can be a challenge for HR teams, especially without compliance experts on staff. If an employer has a distributed workforce across the country, HR teams will have to be on top of state specific requirements in CA, MA, NJ, RI, VT, or DC.
Ever-changing updates to requirements
ACA reporting requirements can change from year to year. HR teams must stay on top of updates to reporting requirements to avoid penalties associated with non-compliance.
Resource constraints
HR teams have many tasks on their hands, especially during critical periods like OE. ACA reporting can be burdensome for teams that are already swamped.
How a reporting provider can help
Outsourcing ACA reporting eases the burden of ACA reporting and reduces the risks of exposure to costly penalties. ACA reporting solutions ensure accurate and timely submissions of reports, giving employers peace of mind as they remove the guesswork and offload time-consuming tasks. Here's how reporting providers can help:
Completion of Forms 1094-C and 1095-C
The ACA mandates that employers submit Form 1094-C to the IRS and Form-1095-C to eligible employees. An ACA reporting solution ensures that these forms are accurately completed.
For self-funded health plans, the completion of Section III on Form 1095-C is required to capture details on employees and dependents covered under the plan. Reporting providers accurately populate this section to fulfill self-funded reporting requirements.
Reporting solutions also track the monthly number of employees for Form-1094-C filing. For employers filing 10 or more returns, eFiling directly with the IRS is handled as well.
Determination of indicator codes
The correct indicator codes for each employee must be selected during the reporting process. Indicator codes reflect the type of coverage offered, along with an employee's eligibility. An ACA reporting solution covers this for employers with a proprietary validation tool to ensure correct codes.
Assignment of correct plan effective dates
Accurate plan effective dates are critical to compliance reporting. A reporting solution ensures these dates are correctly assigned for each employee, reflecting the actual start of their coverage.
Get back your peace of mind
Outsourcing ACA reporting provides much-needed relief to HR teams. With essential support from a reporting solution, HR can alleviate the administrative burden that comes with ACA reporting. A reporting provider can ease time-consuming tasks and demanding reporting requirements to lift pressure from already overworked teams. Ultimately, outsourcing ACA reporting frees up time for HR teams to focus on more strategic initiatives.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
