Prepare for ACA Reporting: A Step-by-Step Guide

It is important that you know what information you need before you begin to prepare for ACA reporting. We’ve identified the following 7 key topics that may help you to correctly and timely complete your ACA filing with our Step-by-Step Guide.

Prepare for ACA Reporting Steps:

1. Identify Common Law Employees

First, you will need to identify all common law employees. According to the IRS, this is defined as anyone who performs services for you if you can control what will be done and how it will be done.

2. Identify Full-Time Employees

The next step to prepare for ACA reporting is identifying full-time employees. The IRS has very specific guidelines regarding what qualifies as a full-time employee.

You can find additional help in calculating the number of full-time employees through the IRS Taxpayer Advocate Service.

3. Verify Employee TIN Information

It is crucial to verify the taxpayer identification numbers (TIN) of your employees in order to avoid having to file corrections, re-issue forms to employees, and potential penalties from the IRS.

Tools such as TINCorrect can help you verify TIN information for your businesses and employees before you file.

4. Confirm Threshold Satisfaction of ACA Requirements

According to the IRS provisions, applicable large employers (ALEs) are required to offer at least 95% of full-time employees minimum essential coverage that is affordable and provides minimum value to their full-time employees and their dependents. Failing to do so may leave you subject to employer shared responsibility payments.

5. Determine Which Affordability Safe Harbor to Use

To put it simply, provided coverage is considered affordable if the premium constitutes less than 9.5% (adjusted annually) of the household income of an eligible employee.

Since household income can be difficult to determine, due to factors such as spousal or secondary income, the IRS offers three safe harbor options to assist in determining affordability.  

6. Determine a Contact Option for Form 1095-C Employee Questions

If your employees have questions regarding their 1095-C forms, they should have a good calling number to address their concerns.

7. Self-Insured Plans: Identify Individuals and Gather Information for Form 1095-C

For self-insured plans, you will need to identify the covered individuals (employee and dependents) and their social security numbers. You can use a date of birth if you have made a reasonable attempt to obtain the social security numbers but were unsuccessful.

It can be difficult to gather all of the necessary information from your employees in a timely manner, so it’s a good idea to gather this information as early as possible. This will help you to prepare for ACA reporting ahead of time!

Need additional information?

Check out our Knowledge Base for answers to our most popular questions. You can also contact us.

BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.

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