ACA Compliance for Employers: A Maze to Navigate

Managing ACA compliance is overwhelming for employers, with complex eligibility tracking, ever-changing regulations, and the constant threat of costly IRS penalties. Without the right tools, businesses risk errors in 1094-C and 1095-C reporting, exposing them to audits, fines, and wasted hours correcting mistakes.

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Employee Tracking Across Multiple Systems

One of the biggest challenges employers face with ACA compliance is accurately tracking hours for different employee types, such as part-time, full-time, variable-hour, and temporary workers, especially when data comes from multiple systems. ACA-Track simplifies this by seamlessly integrating with any payroll or HRIS platform, as well as automated time clocks, mobile apps, and manual timesheets. Its ability to aggregate all these sources into one centralized system ensures that businesses maintain accurate and comprehensive records of employee hours, reducing the risk of missed eligibility thresholds.

Managing Eligibility and Avoiding Missed Thresholds

Employers often struggle to monitor employee eligibility in real-time, increasing the risk of non-compliance penalties if thresholds for full-time equivalent (FTE) hours are exceeded without offering benefits. ACA-Track provides advanced alerts when employees approach eligibility thresholds, giving employers time to act before non-compliance occurs. By tracking events like waivers, leave, and other status changes, ACA-Track ensures that organizations have a clear view of benefit eligibility at any moment, minimizing the chance of oversight.

Any payroll system and medical plan

ACA-Track seamlessly integrates with any payroll system or medical plan, eliminating the need for costly software upgrades or complicated data conversions. Whether your business uses time clocks, manual timesheets, or mobile entry systems, ACA-Track aggregates employee data from multiple sources into one cohesive platform. This compatibility ensures smooth tracking of hours, benefits eligibility, and reporting, regardless of your existing systems. With no need for customized APIs, businesses can easily upload data in formats like Excel or CSV, making ACA compliance effortless and efficient.

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SSAE 16 SOC 2 Type 1 compliant

ACA-Track is SSAE 16 SOC 2 Type 1 compliant, ensuring the highest standards of data security and operational controls. This certification demonstrates that ACA-Track follows strict protocols for protecting sensitive information, providing assurance that personal and financial data is managed securely. With encrypted data storage and secure HTTPS transfers, the platform safeguards your organization’s compliance information, reducing the risk of breaches or unauthorized access. Whether you’re managing payroll data or ACA reports, ACA-Track’s certified infrastructure ensures reliability, security, and peace of mind.

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FTE count & employee benefit eligibility tracking

ACA-Track offers FTE count and employee benefit eligibility tracking, making it easy to monitor employee status and ensure compliance with ACA requirements. The platform accurately calculates full-time equivalent (FTE) employees by aggregating hours worked across all employee types, including part-time, variable-hour, and seasonal workers. With real-time alerts, ACA-Track notifies employers when eligibility thresholds are met, helping them offer benefits on time and avoid penalties. This automated tracking ensures businesses stay ahead of ACA mandates while minimizing administrative burden and reducing the risk of errors.

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Creates Form 1095-C and 1094-C, calculates codes for Form 1095-C

ACA-Track simplifies ACA reporting by creating Form 1095-C and 1094-C and automatically calculating the necessary codes for accurate filing. The platform ensures compliance by generating these forms with the correct employee coverage details, affordability status, and safe harbor codes. ACA-Track’s automated calculations minimize the risk of human error, streamlining the preparation process for both federal and state reporting. With built-in validation tools and error correction features, employers can submit accurate forms to the IRS on time and avoid costly penalties.

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Error-Prone Reporting and IRS Filings

Navigating ACA reporting requirements can be daunting, with complicated 1094-C and 1095-C forms often leading to filing errors. Mistakes during the submission process can trigger penalties or IRS rejections, creating administrative headaches for businesses. ACA-Track offers built-in data integrity checks and error correction tools that allow employers to catch mistakes during data uploads. The platform also provides automatic error notifications and resubmission features, making the entire process efficient. Moreover, it allows for test submissions to the IRS, ensuring reports are error-free before final filing.

Time-Consuming Audit Preparation and Penalty Mitigation

In the event of an IRS audit or healthcare exchange inquiry, retrieving ACA data quickly and accurately can be stressful for employers. ACA-Track stores all compliance data in one secure, accessible location, streamlining audit preparation and minimizing the burden on HR departments. With features like snapshot summaries, employers can preserve historical records and easily retrieve information as it was at specific points in time. Additionally, ACA-Track offers support from dedicated account managers who assist with audit responses, corrections, and penalty mitigation, ensuring peace of mind even in complex scenarios.

ACA-Track – Your Trusted Vendor

For employers and managers tasked with ensuring ACA compliance, the process can feel overwhelming, time-consuming, and fraught with the risk of costly penalties. Staying compliant means not only keeping up with constantly changing regulations but also accurately tracking hours for a diverse workforce, managing eligibility thresholds, generating complex reports, and handling IRS filings. Many businesses lack the internal resources to manually manage these tasks, especially when working with multiple data sources and systems that don’t communicate seamlessly. ACA-Track addresses these challenges by automating the entire compliance process—from tracking employee hours and benefit eligibility to generating 1094-C and 1095-C forms—reducing the administrative burden on HR teams. Managers no longer have to worry about juggling spreadsheets, manually correcting errors, or navigating the complexities of IRS submissions. With ACA-Track’s data integration and error-correction tools, they can be confident that the data is accurate and complete on the first submission, eliminating the back-and-forth with the IRS. The platform’s real-time alerts also give employers peace of mind by flagging potential compliance issues before they escalate into costly problems. Moreover, the dedicated support from an assigned account manager ensures that employers have expert guidance whenever they encounter issues—making ACA compliance not just manageable but efficient and reliable.

Avoiding IRS Penalties and Legal Risks

One of the most pressing reasons for ACA compliance is to avoid financial penalties. The ACA requires Applicable Large Employers (ALEs) with 50 or more full-time or full-time-equivalent (FTE) employees to provide affordable health insurance to eligible workers. If a company fails to offer adequate coverage or submits incorrect reports to the IRS, the penalties can be severe. The IRS assesses penalties under sections 4980H(a) and 4980H(b) for non-compliance with health insurance requirements, with fines starting at $2,970 per full-time employee per year for 2024, excluding the first 30 employees.

Beyond financial penalties, employers also risk additional legal complications from audits and state exchange reviews. If compliance issues arise, businesses may need to navigate time-consuming and costly investigations, potentially damaging their reputation and creating legal liabilities. Staying compliant not only helps avoid fines but also reduces legal risks associated with employee complaints, disputes over benefits, and compliance audits.

Ensuring Accurate Employee Eligibility Tracking

Tracking employee eligibility is one of the most challenging aspects of ACA compliance, especially for businesses with part-time, variable-hour, or seasonal employees. Employers must monitor the hours worked by each employee to determine whether they meet the ACA’s full-time eligibility threshold of 30 hours per week or 130 hours per month. Failure to correctly track eligibility can result in unintentional non-compliance, such as failing to offer benefits to a qualifying employee.

Real-time tracking is essential to prevent these errors. Employers need systems that can aggregate data from multiple sources—like payroll, time clocks, and manual time sheets—to ensure accuracy. Without an integrated solution, HR teams may spend excessive time manually consolidating records, increasing the risk of human error. An automated platform like ACA-Track helps mitigate these risks by collecting hours from all sources, tracking eligibility thresholds, and providing advance alerts when employees near eligibility, ensuring that employers can take timely action.

Streamlining IRS Reporting with 1094-C and 1095-C Forms

The ACA requires employers to file IRS Forms 1094-C and 1095-C to demonstrate that they are offering affordable health coverage to eligible employees. These forms document which employees were offered coverage, whether the coverage was affordable, and which employees accepted or waived the offer. For many organizations, the complexity of generating these reports—especially if they involve multiple coverage groups or data from various systems—creates a major compliance challenge.

Errors in these forms can trigger IRS rejections, penalties, or audits, adding significant administrative burdens. Additionally, reporting deadlines are strict, and missing them could result in fines. ACA-Track simplifies the reporting process by automatically generating the necessary 1094-C and 1095-C forms with the correct codes, ensuring compliance. It also enables employers to test submissions to the IRS in advance, reducing the chance of filing errors. The platform’s error-checking tools identify mistakes before submission, and any corrections can be made directly within the software, minimizing disruptions.

Supporting Internal Efficiency and Resource Management

ACA compliance can place a significant strain on internal HR and payroll teams, particularly for businesses that manage large workforces or have multiple locations. Manually tracking hours, calculating FTE status, and ensuring data accuracy across various platforms is not only time-consuming but also diverts resources away from other critical HR activities. Employers that rely on spreadsheets or fragmented systems risk data inconsistencies and reporting delays, further complicating compliance efforts.

Automating the compliance process with a platform like ACA-Track helps organizations maintain internal efficiency. By integrating seamlessly with payroll and HRIS systems, ACA-Track eliminates the need for manual data consolidation, reducing the risk of errors. Its user-friendly dashboard allows managers to quickly access relevant information, monitor compliance in real-time, and generate reports without delays. With ACA-Track’s dedicated account managers providing personalized support, businesses can also offload much of the administrative burden, allowing HR teams to focus on other priorities.

Preparing for Audits and Minimizing Risk Exposure

Even if an employer takes all necessary steps to comply with the ACA, they may still face an IRS audit or state healthcare exchange inquiry. In these situations, having quick access to accurate, historical data is crucial. Businesses need to maintain detailed records of employee hours, benefits offered, and eligibility determinations to demonstrate compliance during an audit.

ACA-Track makes audit preparation easier by storing all ACA-related data in a centralized, secure location. Its “snapshot” feature preserves historical records, ensuring that managers can retrieve data exactly as it appeared at any point in time. This functionality is critical when responding to audit requests, as it provides verifiable proof of compliance. In addition, ACA-Track’s dedicated account managers assist clients throughout the audit process, translating IRS error messages and guiding them through the correction and resubmission process. This level of support reduces stress and ensures businesses are fully prepared to handle any compliance inquiries.

Enhancing Data Security and Reducing Compliance Risks

With increasing concerns around data privacy and security, employers must also ensure that employee data is handled safely during the compliance process. The ACA requires the collection and storage of sensitive personal information, such as Social Security numbers and employee status, which must be protected from breaches. A data breach exposing this information could not only result in legal liabilities but also harm employee trust.

ACA-Track addresses these concerns by encrypting personal data within its cloud-based platform, ensuring that even in the unlikely event of a breach, sensitive information remains protected. The system also follows SSAE 16 SOC 2 Type 1 standards, providing assurance that data is managed securely and in compliance with industry best practices. Secure HTTPS data transfers further reduce the risk of exposure during reporting and file submissions.

Affordable Care Act: Compliance is Vast and Nuanced

Staying compliant with the ACA is essential for businesses to avoid financial penalties, reduce legal risks, and maintain operational efficiency. The complexity of tracking eligibility, generating accurate reports, and preparing for audits makes ACA compliance a challenging task for many organizations. Platforms like ACA-Track help employers navigate these challenges by automating the compliance process, providing real-time alerts, and offering dedicated support. With advanced error detection tools and secure data management, ACA-Track ensures that businesses stay ahead of regulatory requirements and minimize their compliance risks. For organizations looking to streamline their compliance efforts and protect themselves from penalties, adopting a comprehensive solution like ACA-Track is not just beneficial—it’s essential.

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