Mandatory Affordable Care Act reporting starts next month and industry experts say preparing employer clients to comply should be a core service offered by benefit advisers. Are your clients ready?
Starting in 2016, applicable large employers must report whether an individual is covered by minimum essential coverage and that an offer of minimum essential coverage that provides minimum value was made to each full-time employee.
Many employers may be well prepared for the reporting requirements and have been tracking information throughout the year to prepare for the deed, but some employers may not be prepared at all. It should be incumbent upon the benefit adviser to act proactively, rally the important players, and head up efforts to comply with the ACA’s reporting requirements, says Joe Ellis, senior vice president at CBIZ Benefits & Insurance Services in Philadelphia.
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“It’s important for brokers to be proactively raising some of the needs of their employer clients,” agrees Keith Pellerin, vice president, head of product at Aflac. “It’s important for brokers to be talking to them about ACA reporting.”
“I would consider it a core service of a benefit adviser,” Ellis says. While some employers may be relying on their tax advisers or accountants to spearhead compliance efforts, he says, the nature of tax accountants is to work backwards for compliance.
“They tend to start work in January and look back,” he says. “But there’s going to be a big scramble on the part of advisers who get calls from frantic clients wondering, ‘Why have you not said anything about this?’”
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Everybody has a toe in the pool, he adds, but no one seems to want to take the ball and be in charge. “If I were the adviser, I would act as the quarterback and say, ‘Let’s have a pre-project huddle.’”
That huddle, Ellis says, should include somebody from the accounting or tax area of the employer, HR and someone from payroll.
“These three different areas of administration generally don’t talk,” he says. In the huddle, a timeline should be prepared and it should be decided who will gather and manage the data required for reporting, who will be in charge and which outside advisers will be involved.
“I suggest a benefit adviser, tax adviser and payroll adviser,” Ellis says. “No one is prepared to advise on all three.”
Tracking
Getting to work first requires determining whether the employer is indeed an applicable large employer.
“The biggest surprise for some employers is that even though they may have union employees offered coverage through a local union, these employees may count toward the determination of whether or not the employer is an applicable large employer,” Ellis says.
Second, are the plans affordable? Are they meeting the minimum requirements under the ACA?
“It’s hard to buy a plan anymore that’s not,” Ellis admits, but adds that plans need to be examined for value and determined to meet the minimum requirements.
For purposes of tracking these two pieces of information, ACA compliance tools are a popular sell.
CBIZ for example, has one dubbed CBIZ Checkpoint. Last week, Aflac announced it, too, will offer an ACA compliance tool as part of a new suite of business solutions.
“The reality is that so few employers really understand the intricacies of ACA reporting,” says Pellerin. “We encourage them to reach out to agents and brokers to find out more.”
He says Aflac’s new ACA compliance tool — as well as other new solutions such as fraud and identity theft protection — is a direct result of feedback from employers and brokers about market needs.
Applicable employers offering minimum essential coverage (other than self-funded employers) must file the forms to track ACA compliance (Form 1095-B and Form 1094-B) with the IRS annually, no later than Feb.28 (March 31 if filed electronically).
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Also, providers of minimum essential coverage are required to furnish a statement for each covered individual by Jan. 31.
