ACA Best Practices From A Happy Survivor
Because of her experience with managing ACA compliance for one of the country’s largest staffing firms, we asked Rachel Stevens, CEBS, SPHR, Director of Benefits and Compensation at Staffmark to speak about her experience and share lessons learned during this first chaotic year of IRS reporting.
Author: Rachel Stevens
The ACA. Three little capital letters, right? It can’t be that hard to figure out? Oh, it’s PPACA? Okay, five little capital letters. Still not hard to implement, right!? Of course not! Thousands upon thousands of pages of regulations, constant change, the ever-present potential that legislation will come about and undo or detour your months of hard work, programming, changes in work flow, communication, it never ends. Who can you talk to about this? Your family? Ha…they would rather walk across hot coals barefoot than act as your ACA therapist and listen to details on the ACA! Your coworkers? Maybe not….they are happy YOU are in charge of that and they don’t have to deal with it. Your vendors? Gosh, I hope so! But we aren’t all that lucky.
Well, after surviving the first full year of the most sweeping health care legislation our generation has ever seen, I have some valuable lessons learned and some new best practices to share. All the while, I am strategically looking ahead to what the rest of 2016 holds in store for ACA Management, especially for those of us in the staffing, retail and hospitality industries.
The 6055/6056 reporting and the first year we were all required to deliver the 1095 form to our employees and the 1094 and 1095 to the IRS was probably the hardest thing I have had to manage in my twenty-year career in HR and Benefits. Like many of you, we have multiple payroll systems, multiple medical plans, missing data, and several sources of benefits enrollment information we needed to pull in. I often joked that this is probably how anyone dealing with the very first year of the W2 felt. The 1095 is the first landscape orientation form the government has ever created! So that must mean something, right? Here are my ACA best practices from someone who has been there, done that, and in the end, happily survived.
ACA Best Practices
Tip #1: Include all the departments at your company that might be involved, even if you assume they don’t need to be.
Project management is something I have done before. I feel pretty good about it! This wasn’t my first rodeo, I could handle this! I just needed to understand the form, the specifications, who the players were, what my deadlines were, and things would be smooth sailing. June of 2015 rolled around, I felt ok, open enrollment was almost complete, and I was looking forward to vacation. Tax filing wasn’t even due until the spring of 2016 – heck yeah, I was in great shape! I started thinking about fulfillment and got a great proposal for printing, postage and a potential call center prepared for our executives. I was ahead of the game on employee communication. A few months passed and we had another meeting, this time with accounting. “How is the 1094/1095 project going?” they asked. “Great” I said. “Who is filing the forms with the IRS?” they asked. “Our tax vendor is, just like the W2’s” I said. Silence…..Big googly eyes….cue panic attack in 3, 2, 1….
As you can probably imagine by now, no one ever thought to follow up on a comment made by another department way back in the spring of 2015 that led me to believe that our incumbent tax filing vendor would also be handling the 1094/1095s. As it turned out, that vendor had cut off new ACA reporting contracts in January of 2015, and we had missed the boat. By the time we found this out, we had also missed the boat with our ACA management software provider. In the end, we were able to directly contract with Equifax’s third party tax preparation partner to get the forms fulfilled and filed on time. Had I stepped back and involved every department I could imagine at the time, we wouldn’t have had to find alternative solutions last fall. Over communicating when it comes to these kinds of projects is never going to fail you!
Tip #2: Data, Testing and Retesting, Oh My!
Data is all around us these days. The amount of information needed for the 1094/1095 forms is overwhelming. Garbage in, garbage out. You have to have good data!! That means you should have started yesterday. So year 1 is over. Year 2 is halfway over, believe it or not! Do you have everyone’s social security number? Date of birth? Current address? Are legal names recorded or do you have nicknames? Are you missing the Jr, Sr, II, III or IV? Guess what? The IRS might kick that back as an error – because what you have in payroll doesn’t match what the IRS has on file. What about those adorable new little babies your employees have. Do you get a SSN recorded when it is finally assigned, or do you gaze at the photos of their chubby cheeks and listen to stories of their cuteness but never go back in and clean up their data fields? Being properly prepared and having good data is one vital key to success when it comes to ACA reporting. Running audits, scrubbing data, keeping up with this all year – you need to be checking your data NOW. Don’t wait until the last minute. Have you ever tried to get accurate data from terminated employees, employees who have moved four times, employees who refuse to answer your phone calls? Yes. It’s a process. You need time. The same goes for testing. Just because you tested once, doesn’t mean something won’t change. Monthly testing is ideal. You can manage small chunks of issues and potentially uncover a root cause and deal with it more productively and successfully if you are not procrastinating and waiting until the last minute. Test, test, and test again! Think of all the weird scenarios, double check actual forms and codes, send test files to the vendors, compare to your benefit enrollment data. Don’t skip the testing or check three or four people and assume everything is ok. It takes time, patience, and some good music playing in the background!
Tip #3: Stay Calm
Something is going to go wrong. Trust me. It will. It did. I say I happily survived! Two weeks before the March 15 print deadline we had major issues with 1095 code accuracy that had not shown up yet in testing. We worked with our benefits vendor around the clock, and with Equifax on the other side supporting us every step of the way. The weekend before the forms were due we had multiple phone calls and what felt like millions of emails, but it wasn’t fixing the issue. I literally sat on my living room floor and thought, “I’m not certain these forms are going to go out correctly. I’m going to have to do thousands of corrections. This will be a communication nightmare. I could have crumbled right then and there. I could have cried. I could have given up. I could have faced what felt like a nearly impossible problem to solve and run away. But I didn’t. I stayed calm. I called my dad, who has spent over 35 years in technology and project management, for advice. I talked to my boss, who supports me 100% and gave me confidence that I could do this. I came up with my own out-of-the-box solution for fixing the bad data, and ran it past Equifax and my benefits vendor, who both thought – that might actually work – and on Monday, it did! On March 15, we sent out over 8000 correct 1095 forms to our employees. It was a pivotal moment in my personal growth and career. Not because in the end we got the job done, but because in the face of a difficult problem, and with the help of family (I thought they didn’t want to hear about the ACA?), great coworkers (the ACA is all of our jobs!) and a wonderful vendor partner in Equifax (yes, I am one of the lucky ones), the team pulled together, supported each other, and solved a tough problem in the 11th hour. That experience made me believe I could do anything that is thrown my way in the future. I stayed calm, and I ended up an ACA Happy Survivor.
2016 – The Future of ACA
The ACA is never “done”. Next on my radar is the impending delivery of the government subsidy notices, and the appeals that follow. Being a multi-state employer with hundreds of branches, we know our notices are going to end up all over the place, and we need to carefully manage the appeal process to protect ourselves from fines we should not receive. We need to have all of our documentation buttoned up and we feel ready for this next challenge. We are also carefully following the 2016 Presidential election and monitoring pending legislation as it flows through Congress. Personally, I don’t think the ACA will be repealed, but I believe we will continue to see changes to the law. With the ACA, it seems the future is always unknown, but we should just hang on, and enjoy the ride!
Upcoming ACA webinar:
The Road to 95%: Mastering ACA Compliance in 2016 and Beyond
Thursday, July 21, 2:00 PM ET
Learning objectives include:
- How to overcome and avoid the top compliance challenges faced by employers in 2015
- Best practices for simplifying ACA management processes and reducing compliance risks
- How to prepare for potential changes and new requirements in 2016
Recommended For You
This week, two important events took place in the world of the Affordable Care Act (ACA): Employers began receiving Letter […]
We’re counting down to the HR Technology Conference & Expo in Las Vegas from Sept. 11-14. HR Tech always delivers […]
Background Per ACA regulations, to avoid compliance risk under Internal Revenue Code section 4980H, an Applicable Large Employer (ALE) — […]
Background In a hearing on July 11, 2018, the U.S. House of Representatives Committee on Ways and Means approved H.R. […]