Preparing for ACA Compliance

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The fall is a good time for employers to begin preparing for the distribution of Affordable Care Act (ACA) 1095 forms, which report healthcare coverage information for employees. These forms must be distributed to employees and filed with the IRS by early next year, making fall the ideal time to start organizing and ensuring compliance with ACA requirements.

Here are several key actions employers should take this fall:

1. ** Review Employee Data:** Ensure that all employee information, including full-time status, names, addresses and Social Security numbers, is accurate and up-to-date. Mistakes can lead to errors in the 1095 forms and may trigger penalties. It’s a good practice to reconcile your data with any external payroll or benefits providers to catch discrepancies early.
2. ** Check Health Coverage Offerings:** Confirm that your organization’s health coverage meets the ACA’s minimum essential coverage (MEC) and affordability standards. If any changes have been made to your health plans during the year, ensure they align with ACA requirements to avoid potential penalties.
3. ** Coordinate with Vendors:** If your organization uses third-party vendors for benefits administration or ACA reporting, now is the time to coordinate with them. Ensure that they are prepared to handle the 1095 form distribution and that they understand your deadlines. If you use BAS for ACA compliance, look for communications this fall to give information about upcoming compliance items.
4. ** Set Internal Deadlines:** Create a timeline to ensure forms are distributed to employees well before the IRS deadlines. The deadline for providing employees with their 1095 forms will be March 3, 2025, and the filing deadline with the IRS is March 31, 2025. Setting internal deadlines in advance helps avoid last-minute issues.
5. ** Communicate with Employees:** Educate your employees about the 1095 forms and what they need to do upon receiving them. Clear communication will help reduce confusion, ensuring employees can accurately file their taxes.

Starting these preparations in the fall will help avoid potential ACA penalties and ensure smooth reporting for the upcoming tax season