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Businesses Still Need to Make ACA Filings on Time

Outline: Indications U.S. Government agencies like the IRS are moving forward with enforcing compliance of existing laws and regulations, including the ACA.

Main Digest

Businesses need to be wary of being lulled into a false sense of security by recent White House executive orders and discussions in Congress about rolling back regulations and repealing the Affordable Care Act (ACA), a regulatory compliance expert warned.

Robert Sheen, president and CEO of First Capitol Consulting, Inc. (FCCI), one of the foremost providers of regulatory compliance services to more than 3,000 companies across the United States, said all indications are that government agencies like the U.S. Internal Revenue Service (IRS) are moving forward with enforcing compliance of existing laws and regulations, including the ACA, and businesses need to be ready.

"Despite all the initial talk in Washington, D.C., it has become clear that a full repeal of the ACA is not imminent," said Sheen. "Companies should expect this repeal and replace process at the federal level to take at least several months. When some form of ACA repeal is approved, we should expect a considerable transition period to take place as new regulations are phased into effect. While this process unfolds, continuing to meet IRS filing deadlines for ACA compliance is critical for businesses to avoid financial penalties and the possibility of an IRS ACA audit."

Sheen, whose company writes a blog on ACA compliance, The ACA Times, said FCCI has been preparing its clients for the IRS paper filing deadline of February 28 and electronic filing deadline of March 31 for submitting 2016 data on IRS 1094 and 1095 schedules. Businesses can face potential penalties under the ACA that run into the hundreds of thousands of dollars or higher for infractions such as late filings and general ongoing non-compliance. A recent industry report projected companies could face up to $31 billion in ACA penalties for non-compliance with ACA requirements for the 2016 tax reporting period. Sheen said none of his clients have run afoul of ACA audits by the IRS for non-compliance for the 2015 tax reporting period, but other companies are starting to receive notices from the IRS.

Sheen said the biggest challenge for companies in complying with ACA regulations is gathering all the documentation required by the law. Companies need to provide data for each employee for each month of employment in 2016 to demonstrate they are providing health care to full-time employees. For a company with 100 employees, that is 1,200 separate entries that need to be provided for ACA compliance. "Keeping accurate track of that employment information can be a major challenge for some companies, particularly small businesses with more than 50 employees who are considered large employers under the ACA," said Sheen. "These companies typically do not have in-house resources that can be dedicated to managing the critical data consolidation process."

He said one of the most common mistakes companies make is not providing for gaps in data and processes. Key findings in preparing ACA reporting for the 2015 tax reporting period included the recurrence of errors in the employee data critical to proper ACA reporting. Such errors included failure to properly recognize employee hire dates and termination dates, salaries, employment classifications, and certain periods of leave of absence.

Sheen suggested that companies ask these three questions as they continue to manage implementation of their ACA compliance requirements:

Sheen said that recent executive orders in New York State concerning equal pay legislation aimed at state contractors indicate that even if there is repeal of certain federal laws such as the ACA, the states may continue to require employers to provide employment information like salaries, gender, race, and age to government agencies.

Even if government doesn't require it, companies who can gather, consolidate and process their employment data into meaningful insights will see tremendous benefits.

"We are living in the age of big data," said Sheen. "Companies that find ways to cost-effectively consolidate their employment data to better understand and manage their businesses will have a real competitive advantage."


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Cite: Journal: Disabled World. Language: English. Author: First Capitol Consulting. Electronic Publication Date: 2017/02/19. Last Revised Date: 2017/02/20. Reference Title: "Businesses Still Need to Make ACA Filings on Time", Source: Businesses Still Need to Make ACA Filings on Time. Abstract: Indications U.S. Government agencies like the IRS are moving forward with enforcing compliance of existing laws and regulations, including the ACA. Retrieved 2019-11-21, from https://www.disabled-world.com/disability/legal/tax/aca-irs.php - Reference Category Number: DW#470-12705.
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