Assess ACA Compliance and Risk Now and Get a Leg UP on Year-End 2018!
Time flies! We are already well into the second half of 2018 and soon all the year-end activities will begin ramping up. ACA Compliance is a critical component for Employee Benefit, HR and Tax professionals’ year-end obligations. So, the time is now to get started off on the right foot. A great way to ensure that year-end 2018 will be a success is to begin now with an Organizational ACA Compliance Assessment.
The Organizational ACA Compliance Assessment provides employers with a comprehensive assessment of their current compliance with the ACA. By reviewing current benefit plans, costs, processes and technology we can identify existing and potential gaps in compliance. The scope includes activities performed by the employer and its Third-Party providers
The outcome of the Assessment should a Total Cost of Ownership (TCO) summary of the employer’s ACA Compliance process and benchmarking this versus best practice as well as a Future State Risk Mitigation Strategy that defines recommended changes to plans, processes and systems to better comply with ACA regulations, tactics for reducing TCO, and a plan for implementing the recommended changes.
A thorough Organizational Assessment encompasses multiple phases which can be completed in as little as a few weeks. These include:
Phase 1 - ACA Employer Shared Responsibility (ESR) Compliance
- Document compliance with Health Plan design by capturing any relevant documents prepared by carriers, actuaries etc. related to, Minimum Essential Coverage (MEC), Minimum Value (MV) and Affordability.
- Review Variable Hour\Part Time and Seasonal Employee Eligibility Measurement technology and methods for Hours Paid reporting process and systems, Initial and Standard Measurement Period establishment and tracking processes, and Offer and Waiver Tracking. Also include Full Time Employee Offer, Waiver and Enrollment Tracking in order to determine that proper offers are being made
Phase 2 - ACA IRS Section 4980 A and B Penalty Employer Liability
- Document Results of Phase 1 and determine the Potential Employer Liability based on whether offers of Health coverage that meets MEC\MV requirements has been made to 95% of Full Time employees.
- Conduce and Affordability Analysis across all Employee Groups
- Determine if any solicitation requirements are necessary to obtain correct Social Security numbers for dependents if these are to be provided in the IRS filing
- Review the communication requirements to be certain that employees have received the marketplace notice and other plan summaries that are required under the ACA
- Calculate of Maximum potential Liability and Sample Scenario Liabilities
Phase 3 - ACA EMPLOYER SHARED RESPONSIBILITY (ESR) IRS Reporting Compliance
- Document Source System and Data Flows for IRS 1094 and 1095 Reporting including Employee Demographic and Employment Status Information, Health Plan Offers, Enrollment and Waiver Elections, and Employee Contribution Affordability based on the various safe harbor is available
- Assess the Accuracy of IRS 1095 Offer and Safe Harbor Code Calculations including a review of ACA Compliance system calculations, in particular to determine that the correct offer and safe harbor codes are observed.
- Sample prior Tax Year’s results and test them versus Best Practices. This analysis requires a detailed examination of each 1095 produced to determine if all the proper coding is in place.
- Review 1095 Printing, Fulfillment and Distribution, plus Correction processes
- Appraise IRS eFiling, Transmission and Correction Methods
- Examine how each of the IRS corrections are handled in particular whether any TIN validation errors require re-solicitation of data by the employer
- Study archival procedures and analyze for potential audit accessibility and accuracy
Phase 4 – IRS Penalty Notice Response Process
- Review employer responses to marketplace notices. The employer may periodically receive reports that certain employees have been granted a subsidy under the ACA. In cases where this is not an accurate representation, since the employer has provided affordable coverage, we will assist in reviewing and responding to these requests if required by the employer
- Evaluate Responses (if any) to IRS Letter 226J including auditing IRS Section 4980 A and B Penalty Impact Analysis, reviewing Premium Tax Credit eligibility determination processes, assessing access to necessary information to complete responses, and evaluating response completeness, accuracy and timing
- Review responses to IRS letter 225J. In some cases, the IRS will move forward assessing penalties either because the information that disputes the penalty was inadequate or has not been accepted by the IRS. In these cases, we will assist in replying to this letter as well
Phase 5 – ACA Compliance Total Cost of Ownership
- Document Prior Year’s Cost for End to End Compliance Process by calculating Internal Labor cost for HR/Benefits/Payroll and IT costs, determining Third Party Costs for Reporting and eFiling Suppliers, Benefits or IT Consulting, the cost of Printing, Fulfillment, and Distribution, and any Legal Fees. Software Licensing or Subscription Fees, and any other ACA related costs will be included here as well
Phase 6 – Final Report Preparation and Presentation
- Review of Current State ACA Compliance Organizational Assessment Report including:
a) Health Plan design, compliance and affordability
b) ACA Compliance Business Processes, including health insurance offer determination and processing
c) ACA Compliance System Inventory, Integration and Assessment
d) Total Cost of Ownership Analysis and Value vs. Standards
e) Risk Analysis
- Recommend Future State Risk Mitigation, Process Improvements and Cost Estimates
The Organizational ACA Compliance Assessment will give an employer a complete view of their past Compliance with the regulations and any resultant potential liability, as well as a review of the TCO of ACA compliance administration, and a plan for process improvements and risk mitigation going forward.
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