At first glance, many employers might think that ACA reporting is just an additional tax season task for the accounting department. However, form 1095-C and 1094-C transmittal requires much more complex information that the accounting department is usually familiar with. This fact tends to build certain challenges in front of the employers in fulfilling the reporting requirements and avoiding the penalties entailed for non-fulfillment.
Challenge 1 – Determining who is responsible for reporting requirements.
As reporting requires a lot of varied data like employees’ TIN’s, addresses, insurance coverage dates and insurance coverage premium costs, it is likely that accounting departments live with an assumption that HR department will be handling the task. The thinking is just opposite when it comes to HR department, who think otherwise. This kind of confusion initiates finger-pointing among different organizational departments, ending up in a state of chaos.
Thus, it is important that the responsibilities are carefully analyzed and everyone is assigned their piece of work to mutually handle reporting easily. The best way is to create a ‘reporting team’ which comprise of members from each required department.
Challenge 2 – What is the source of incoming data?
The next challenge is to determine how the employees’ data collected from various departments or sources like insurance provider, etc. is compiled. Determine in what form data needs to be transmitted/received and ensure everything is securely aggregated for reporting purpose. Take help of the IT department to ensure data accuracy and safety throughout the transmission.
However, all this requires proper strategy and planning to guarantee compliance with various ACA legislation requirements, thus it is crucial that you start early and have a proper plan in place.
Challenge 3 – Handling employee relation issues regarding ACA reporting.
ACA reporting is as much alien to the employees as it is to the employers, thus your employees are definitely to encounter various issues with the new law and their role within the same. It is the responsibility of the employer to direct their employees on the new reporting requirements and its effect on them.Best way is to appoint some members from the accounting or HR department to help employees with their queries, help them how they can handle their tax returns and instruct them about what the whole ACA reporting is all about through various training sessions and educational seminars.
Yes, ACA reporting might look like a daunting task, but these challenges must not let you down in any sense. Take sufficient time to analyze the requirements ACA reporting puts forth for you, your available choices to ease the pain and then make a perfect plan to get everything done right.
TeemWurk can be your ultimate partner when it comes to ACA reporting and complying with various rules and regulations. The entire process of filling up required forms and submitting the information to IRS is made extremely simple and effective, ensuring compliance with IRS regulations while avoiding the hefty penalties.
