Requirements:
In order to complete ACA reporting and compliance reviews you must have the Clarity Human Resources Module. ACA regulations are based on a combination of Payroll and Human Resource information and therefore access to both modules is necessary.
Restrictions:
While Clarity can host multiple companies within its framework and with a single login you are able to access all of these companies Clarity maintains each of these companies independent of each other in separate database files. Therefore Clarity cannot amalgamate these records together to produce an ALE Aggregated Group.
Setup:
Setup of Clarity for ACA reporting and compliance capability can be accomplished in a few simple steps. While these steps are not difficult it is important that they are followed appropriately or you reporting will be inaccurate. Setup is broken into three key areas consisting of Company definitions, Employee definitions and Benefit definitions.
Company Definitions:
There are three sets of parameters you must define under Configuration > Company > Company Edit [Affordable Care Act] tab.
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Self-Insured Employer Indicator: Check this indicator if your company is providing their own insured benefit plan not part of a government plan, insured plan or coverage offered in the small or large group markets within the state, or a grandfathered group plan.
Certification of Eligibility:[i]
This parameter consists of four (4) options, your company will typically be selecting one (1) of these options however, on some occasions, and more than one option may be selected.
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98% Offer Method: d
Benefit Definitions:
In order to do ACA reporting you must define Benefit Plans in the Human Resources module. Creation of benefit plans in Clarity consists of four (4) definitions, three (3) of which are required. The setups for benefits can be found in Setup> HR Settings > Benefits
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For the 1st benefit plan that is for new hire employees during their assessment period (or first month of employment) enter the plans Offer of Coverage as 1H, for the second plan enter the appropriate Offer of Coverage option that your company is using.
Usage:
Usage is very simple in the system and restricted to two areas of the software. Under employeesàGeneral Information à[Payroll] tab you have a field for the ACA Employment type, this must be selected in order for the system to determine if the employee is full time, full-time equivalent or a different type. For ACA reporting only employees of full time or full time equivalent status are counted in your employee counts. Changes to this value will populate the employee history in current company records. These records are date-stamped with the date of the change and the new value. The ACA compliance reporting will check the Human ResourcesàEmployee History in Current Company section to determine for each month in a year what the employees ACA employment status type was. Therefore, if you make a change to the ACA Employment type of the employee and want the effective date of the change to be different from the current date than after making the change you must go to the above mentioned section and change the date appropriately.
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If the employee has left the company, voluntarily or not, and the benefit plan would have covered every day of the month had they stayed employed enter the end date of the benefit plan as the last day of the month. The employee has coverage for the entire month and while their termination may not be the last day of a month their coverage is still for the whole of the month.
Analysis:
Under Human ResourcesàAffordable Care Act you can review your employee and company ACA compliance information quickly and easily.
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You’ll also see a compliance column. This will show up based on the option you chose for certification of eligibility. If your selection was 98% offer method clarity will show compliance if 98% of the employees were offered coverage and it was affordable. If either Qualifying offer methods were selected the ratio will be checked at 95% and if you selected the 4980H Transition relief option the compliance will be checked at 70%.
Reporting:
ACA reporting requires you to complete a 1094 and a 1095 report, the former being the employers copy with the IRS and the latter being the employees copy you must print and distribute to your covered employees for their own reporting purposes.
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After you have completed and printed the appropriate 1095 report you can than proceed to do the 1094 report, selecting the B or C version respectively based on your employee count. This report may be printed and mail filed with the IRS unless you have more than 250 employees, if this is the case you are required to electronically file your reports with the IRS using the Aatrix e-file system.
What is it?
Affordable Care Act, ACA, also known as “Obama Car” is a new regulation for US HR Systems that came into effect in 2014. Companies were provided the opportunity to optionally file the reports in 2014 and required to report for 2015.
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What is Coverage:
While this doesn’t affect us at Paymate in any way of support or implementation, it’s good to know that ACA is HEALTH coverage only, and must cover at least 60% of the expenses a person would incur to receive medical assistance.
The coverage does not include Dental or Vision, strictly health such as hospital visits, casts, lifesaving required medications (not prescriptions such as T3’s or anti-depressants)
Coverage must be affordable:
Companies that have more than 50 full time employees must provide coverage to their staff. This coverage must be considered affordable to their employees, there are three (3) ways to determine affordability:
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Affordability cannot exceed 9.5% of the employees’ wages as per the above three (3) options, companies can use different methods for each employee are typically only need to be reported for full time employees who have waived/cancelled the enrollments.
What are FTE employees, and why are they important?
FTE, or “full time equivalent” employees’ are very unique and important to understand.
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This is done ON PURPOSE, so companies don’t attempt to diluted the work force with part time employees in an effort to avoid being require to offer coverage.
The report[iv]
Will a company be penalized?
A major issue with ACA is the way it’s handled, a company may not know penalties are coming until it’s too late. However a company can be prepared as best as it can be.
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