There will be plenty of headaches as employers go through the first year of the Affordable Care Act reporting requirements. But there is also opportunity for employee benefit brokers. Helping clients navigate this process can increase a broker’s value and secure those clients for the long-term, says Bobbi Kloss, HR director at Benefit Advisors Network.
“This is really a huge opportunity for those trusted advisers to really integrate themselves with their clients on education,” she says. “It’s not about pricing anymore. It’s about that knowledge base and how they can help their clients navigate these ever-changing, complicated ACA requirements.”
Determining eligibility is one challenge, Kloss says. “We still see many employers who are trying to confirm 2015 eligibility,” she says.
A majority of employers are using payroll data to measure their workforce, says Jim King, vice president and COO at CBIZ. The challenge, he says, is dealing with employees who were previously considered part-time but are now considered full-time under the ACA — those who work at least 30 hours a week. Because those employees’ hours can fluctuate month to month, employers need to be imputing data every pay period to accurately measure which employees they are required to offer benefits to, King says. While difficult, dealing with payroll data isn’t impossible, and many employers understand the process, he says.
Defining healthcare plans is where it gets complicated. Finding data, such as eligible employees, employer and employee contributions and the number of times a health plan was offered, is not easy, King says. That’s especially true for the latter. Employers tend to think finding the number of times a health plan was offered is simple because benefits are offered once during open enrollment, he says. However, new employees join organizations throughout the year and existing workers can have qualifying events — each time requires another health plan offer, and each offer must be recorded.
“It’s not the reporting, it’s getting your arms around the data,” King says. “There’s a lot of moving parts with the data.”
The problem is that most employers use multiple platforms — one for payroll, one for benefits, etc. Human capital management (HCM) systems that house all the needed data in one place are gaining popularity in the benefits world, King says, and he expects more employers to switch to a single platform for their payroll and benefits in the future. “That will go a long way to alleviating the discomfort many employers are feeling trying to run all of this data down.”
Some employers exacerbated the situation by waiting until the end of the year to begin work on the reporting requirements, King says. Had the IRS not granted an extension, employers would have had just one month to send the proper forms to their employees. While that deadline has been extended until March 31, and the new deadline for submission to the IRS has been pushed back until June 30, employers should be working on this right now, Kloss says. “They still need to push forward on this.”
Unfortunately, those employers could be forced to handle the reporting requirements on their own, as many vendors have stopped taking new clients, says John Garner, chief compliance officer at Bolton & Company.
Helping clients find a vendor for their ACA reporting was a unique experience, Garner adds. “It’s unlike anything else we do. We can’t check references for this. It’s all brand new.”
As such, Garner expects a big shakeup before next year’s reporting gets underway. “We will see a lot of people change from one vendor to another after this process is over,” he says.
The IRS is also providing relief from “penalties under sections 6721 and 6722 for 2015 returns and statements filed and furnished in 2016 on reporting entities that can show that they have made good faith efforts to comply with the information reporting requirements.” However, submitting on time is crucial, Kloss says. “Good faith doesn’t mean waiting until the last minute,” she says.
A major question brokers have is ensuring their employer clients have selected the right codes on the reporting forms, says Stacy Barrow, partner at Marathas Barrow & Weatherhead LLP. “I’ve done that for countless clients over the last couple months,” he says. “They don’t want to have any exposure to penalties when they don’t need to.”
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