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ACA Reporting Doesn’t Start in January. It Starts Now.

Every year, as January approaches, many employers shift their attention to Affordable Care Act (ACA) reporting. It’s understandable. Filing deadlines are around the corner, Forms 1094-C and 1095-C need to be prepared, and everyone wants to avoid costly mistakes.

The problem is that by January, many of the issues that create reporting headaches have already occurred.

In our experience, the employers with the smoothest ACA reporting seasons aren’t necessarily the ones with the biggest HR teams or the most sophisticated systems. They’re the ones who treat ACA compliance as a year-round process instead of a year-end project.

If your organization may be subject to ACA reporting requirements, now is an excellent time to perform a mid-year checkup.

Step One: Confirm Your Applicable Large Employer (ALE) Status

The first question every employer should answer is whether they qualify as an Applicable Large Employer (ALE).

Generally, businesses that averaged 50 or more full-time employees, including full-time equivalent employees (FTEs), during the previous calendar year are considered ALEs and are subject to ACA employer reporting requirements.

For growing businesses, this isn’t always as straightforward as it sounds. Hiring, acquisitions, seasonal fluctuations, and workforce changes can all affect your status.

If you haven’t reviewed your employee counts recently, now is the time.

Review Employee Hours Before It’s Too Late

Variable-hour employees often create the biggest ACA challenges.

Employees who consistently work more hours than expected may become eligible for health coverage without anyone realizing it until reporting season. By then, correcting historical data can be both time-consuming and stressful.

Mid-year is a great opportunity to review:

• Variable-hour employees
• Seasonal employees
• Employees approaching full-time status
• Measurement and stability period tracking (if applicable)

Finding these situations now gives employers time to address them before year-end.

Make Sure Your Employee Data Is Accurate

ACA reporting depends on accurate employee information. Even small errors can delay filing or require corrected forms.

Take time to verify:

• Employee names
• Social Security numbers
• Current mailing addresses
• Employment status
• Hire and termination dates

These may seem like minor administrative details, but they’re some of the most common reasons employers encounter reporting issues.

Reconcile Payroll and Benefits Data

One of the biggest mistakes we see is people assuming their payroll and outside benefit administration systems always stay in sync.

If employee deductions, benefit elections, eligibility dates, or employment records don’t match between systems, ACA reporting becomes much more difficult.

Before year-end, compare:

• Payroll records
• Health plan enrollment
• Benefit effective dates
• Coverage offers
• Employee eligibility information

Resolving discrepancies now is much easier than trying to untangle them in January.

Confirm That Offers of Coverage Are Being Tracked

ACA reporting isn’t simply about who enrolled in coverage. It’s also about documenting whether affordable, minimum essential coverage was offered to eligible employees.

Employers should periodically confirm that they can answer questions such as:

• When was coverage offered?
• When did the offer become effective?
• Was the offer accepted or declined?
• Was affordability calculated correctly?

Having this information readily available makes year-end reporting significantly easier.

Don’t Wait Until January to Find Problems

January is a great time to file ACA forms.

It’s a terrible time to discover missing employee data, inaccurate records, or incomplete coverage information.

Spending a few hours reviewing your ACA readiness now can save days of investigation later. More importantly, it can help reduce the risk of reporting errors and unnecessary penalties.

ACA compliance has become increasingly data-driven, and the quality of your reporting is only as good as the information you’ve collected throughout the year.

Key Takeaways

If you only remember a few things from this article, make them these:

• Determine whether your organization qualifies as an Applicable Large Employer (ALE).
• Review employee hours and eligibility before year-end.
• Audit employee demographic information for accuracy.
• Reconcile payroll and benefits data to identify discrepancies.
• Verify that offers of coverage are being tracked and documented properly.
• Don’t wait until January to discover problems that can be addressed today.

Premier Perspective

After more than 70 years combined in payroll and HR experience, one thing has become clear to us: compliance isn’t usually derailed by one big mistake. More often, it’s the result of small issues that go unnoticed until reporting deadlines arrive.

ACA reporting is a perfect example. The organizations that have the smoothest filing seasons aren’t necessarily the largest or the ones with the biggest HR teams. They’re the ones that make compliance part of their ongoing process instead of treating it as a January project.

A few hours spent reviewing your data now can save days of frustration later.

Let’s Talk!

ACA compliance doesn’t have to be overwhelming, and every organization’s situation is different.

Whether you’re reviewing your Applicable Large Employer (ALE) status, validating employee data, or simply looking for a second opinion on your current process, we’re always happy to have a conversation.

At Premier HCM, we believe the best compliance strategy is a proactive one. If we can help you prepare today so filing season is easier tomorrow, we’d love the opportunity to connect.