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Five Common ACA pitfalls that took place in 2021.

By Michael Weiskirch

Principal EmployeeTech

If you are over 50 FTEs, The ACA has been part of your annual benefits routine for the past six years. Yet, after all this time employers are struggling with their ACA reporting. We have seen several issues pop up over the last few years based on changes in state and federal legislation and clients are becoming savvier buyers. Below are some of the most common pitfalls:  

1.HR/ Payroll system only reports on employees in their system. HR and payroll systems are designed to administer payroll and other functions for a designated population which can be defined by federal tax IDs (FEINs), locations and other factors. Often companies acquire organizations on different payroll platforms. If this occurs, the population of employees not in the primary system the system may be on their own to handle ACA reporting.  

Solution HCM file can file for multiple entities or a single entity tax ID that is looking to carve out and handle their reporting.  

2.Transition of HR and payroll systems. With new technology being introduced on a regular basis companies are constantly in flux with their HR and HCM solutions. This change often occurs sometime during the year and can split the client for ACA reporting between two systems.  

Solution We aggregate this data into a combined fling process and can contract for just the transition year.  

3.HR or payroll system does not handle state filings. Since 2019 state-based filings have been required. Currently California, New Jersey, Rhode Island, Vermont as well as District of Columbia require their own ACA filing. This creates a problem as companies complete their ACA federal filing only to realize their solution does not handle the state portion.  

Solution We automatically submit for state filing for any employees in one of the ACA states. This does not require any additional work on your end.
4.ACA solution does not complete the process. Many solutions in the marketplace claim to provide “full” ACA reporting but fall short on one side of the equation. We have seen stand-alone ACA reporting solutions requiring the employer to determine the actual coding that goes on the form. They will file it but most of the complexity falls back on the employer. On the other end of the spectrum several payroll and HR systems determine the coding but do not file with the state or the IRS. Others do not provide adequate assistance on the compliance support side.  

Solution HCM is a true end-to-end ACA solution including compliance support. We assign an account manager that gets them over the finish-line in a compliant manner.  

5. ACA system does not handle the complex needs of the client. Employers, especially those that in acquisition mode can be complex. They can have multiple FEINs, contribution schedules, union plans, safe harbors, and different plan dates. All this factors into the client’s complexity and can be challenging for many solutions.  

Solution Because we specialize in ACA reporting for all size employer, we handle the most complex employer situations.
Interested in learning more about how we can support your ACA needs? Click below to schedule a consultation or simply download our brochure.
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Michael Weiskirch is the founder of employee tech, firm that specializes in ACA reporting and HR Technology consulting. Michael’s began his career as a wholesaler on the employee benefits side and switched over to technology sales in 1999. As a leader and innovator, he structured partnerships with regional and large national brokers. In 2013 he founded EmployeeTech which has served over 2500 customers.
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