We’re almost halfway through 2015 … has your company been keeping track of employee healthcare expenses?
Employers with 100 or more employees will have to start reporting in January 2016 under the Affordable Care Act (ACA). (Employers with 50-99 employees get an extra year.)
You can’t just pull it together in December. IRS’s forms require companies to track expenses on a monthly basis. Among what you need to have:
- employees’ hours worked
- employees’ access to employer-provided health care, and
- employee contributions to employer-provided health care.
Which means it’s time to get things in gear!
If you haven’t got a plan yet, you’re far from alone. Just 10% of companies implemented a system to comply with these health reporting requirements in the first quarter of 2015. That’s the finding of a recent survey by PricewaterhouseCoopers (PWC) and Equifax Workforce Solutions.
Another 16% said they hadn’t even considered any solutions yet.
But there is one option a large number of your peers say they will consider: outsourcing ACA reporting requirements.
And there are plenty of avenues to do that. Take a look at what the PWC survey found to see if any of these are worth considering.
Different options for different sized employers
The third-party options vary by company size. As your company decides how it will handle its own compliance, you can use these benchmarks of your peers’ approach to help guide your own decisions.
If you have fewer than 1,000 employees, here are the most popular third-party reporting options:
- payroll vendor (48%)
- dedicated ACA compliance vendor (13%)
- HR systems provider (10%), and
- Benefits administrator (10%).
Your peers with 1,000-5,000 employees are most frequently considering these options:
- payroll vendor (25%)
- dedicated ACA compliance vendor (24%)
- benefits administrator (19%), and
- HR systems provider (10%).
Lastly, the largest employers out there plan to go in a slightly different direction for help with this task:
- dedicated ACA compliance vendor (35%)
- benefits administrator (29%)
- payroll vendor (10%), and
- tax information reporting firm (7%).
But whether you decide to go it alone or enlist the help of an outside expert, there’s one thing you need to get a handle on now: the quality of your data.
2 in 3 concerned about quality
Nearly two-thirds (65%) of employers are concerned about the quality of the data they’ll need for reporting to IRS.
The biggest hurdle? A lot of the info you’ll need for those Forms 1094 and 1095 is housed in different systems: time and attendance, payroll, HR and benefits. Some might not even be in-house depending on what you outsource already.
So no matter what route you ultimately go to get that data into IRS’s hands, first you need to nail down how you’ll synthesize complete and accurate info.
Experts caution the feds will be carefully scrutinizing these returns, so there’s not a whole lot of room for error.
There’s no time to lose, either – if your company isn’t already having this conversation you need to start it now.
Info: For the complete survey, click here.
