A Response To IRS Call for ACA Feedback

Screenshot 2024 06 11 At 21.20.23

By Ken Phillips BENEFITSCAPE CHIEF INNOVATION OFFICER
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The IRS has invited feedback on the ACA reporting and compliance process — more specifically, on the efficiency and utility of FORMS 1094-C and 1095-C.

BENEFITSCAPE’s response is a very practical one.

Our focus has always been on developing specialist ACA technology — in conjunction with best-in-class managed services — to leverage and optimize the latest HCM systems and their ACA modules, thereby increasing efficiency and radically reducing the burden of ACA reporting for employers — a burden that the IRS estimates to exceed 25 million hours annually.
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REGTECH BRIDGES THE HCM SaaS GAP
HCM technology continues to evolve, and ACA reporting benefits greatly from these advances. Today, systems like Oracle Cloud, Dayforce, Workday, and SAP typically contain up to 95% of the data and much of the functionality needed to process every employee’s FORM 1095-C and to e-file the employer’s final ACA submission to the IRS.

But not all the needed data or all the functionality all of the time — and certainly not with risk-free and friction-free efficiency.Within each unique employee population, the employee-level granularity required for ACA reporting inevitably generates noise, errors, and anomalies in the reporting data.

This SaaS gap is not a failing of advanced HCMs — just the real-world consequences of outlier employee scenarios, change management challenges, multi-source integration issues, and the sub-optimal configuration of HCMs for more complex and dynamic workforces. HCM batch-processing of IRS tax submissions compounds these issues and their repercussions when ACA filing is included.

BENEFITSCAPE ACA_REGTECH* and best-in-class ACA managed services bridge this HCM SaaS gap. How? Through intelligent and pro-active ACA diagnostics; advanced data synchronizationacross all systems, other data sources, and user touchpoints; and throughspecialist understanding, troubleshooting, and processing of ACA tasks & e-filing for each individual employer as required.

If not identified and addressed, the 5% SaaS gap in ACA data on every HCM can lead to delays and costly resource burdens for the employer as well as IRS penalties.
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ACA DIAGNOSTICS & THE IRS REGTECH REVOLUTION
BENEFITSCAPE ACA_REGTECH* diagnostics work in three ways to transform ACA reporting on all HCMs, including the accuracy and efficiency of processing IRS FORMs 1094-C & 1095-C.
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1] BENEFITSCAPE diagnostics audit, troubleshoot, and support optimization of each employer’s existing HCM configuration for ACA data and reporting.
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2] The same diagnostics Flag & Fix the noise and data errors that can occur at any stage in the ACA process or across systems and other data sources, including during change management.
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3] Finally, prior to e-filing ACA submissions via the IRS AIR system, BENEFITSCAPE audits each submission using algorithms replicating the IRS new advanced regulatory technology [regtech].
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It should be noted that 2023 saw serious investment by the IRS in both regtech and a new army of data scientists. As David Rawder noted on Reuters [April 10, 2023], “the IRS is set to hire nearly 20,000 staff over two years with $80 billion in new funds.”

The IRS has described this regtech initiative as an “historic opportunity” to transform its auditing capacity and shift focus onto complex corporate returns, an area that it confesses had “previously seen minimal audit rates.”

BENEFITSCAPE’s position as the leading ACA specialist has given us both the expertise and robust ACA data to develop employer regtech that identifies exactly the ACA data errors and noise that we know can incur IRS penalties and trigger closer IRS scrutiny. You can read more from BENEFITSCAPE on the IRS regtech revolution here.
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CONCLUSION
BENEFITSCAPE ACA_REGTECH* and ACA managed services are our on-going practical response to the IRS call for feedback on the efficiency of ACA reporting and compliance. Our specialist regtech and best-in-class expertise transform the efficiency of ACA reporting and compliance for 1000s of employer’s of all sizes in all sectors — and on all HCMs and ACA modules.

BENEFITSCAPE optimizes HCM configuration.

We run intelligent diagnostics and synchronize ACA data across all systems and sources, including for complex or changing workforce scenarios.

And we execute specialist ACA tasks and services for each employer as required.

The time taken to produce a FORM 1095-C is reduced to nano-seconds; data and IRS coding accuracy is assured, including affordability calculations; and every final submission to the IRS is pro-actively audited.

In all these ways, BENEFITSCAPE helps maximize the value every business gets from its investment in both HCM systems and health benefits for its employees.

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BENEFITSCAPE was founded to apply breakthrough new technologies to specialist benefits administration and compliance for employers, quickly becoming the leader in ACA reporting and compliance. Our commitment to innovation and excellence continues to position us as leaders in this crucial aspect of workforce management.

BENEFITSCAPE also continues to provide detailed, specialist feedback to the IRS, including strong advocacy of an API strategy for enhanced direct communications between HCMs and the IRS — just one further way of streamlining ACA reporting and compliance.

We are proud of our client list, and even the IRS employs us for our regtech expertise. If you would be interested in a regtech audit of your company’s TY23 ACA reporting, or to discuss any aspect of ACA compliance for TY24, please do not hesitate to email info@benefitscape.com or to call +1 508-655-3307.

We look forward to connecting with you.

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