Responding to IRS ACA Audits
Hello again,
This post is for Applicable Large Employers (ALEs) required to comply with the Affordable Care Act. We hope you find it useful.
As a company owner, HR manager, or administrative professional, you may be tasked with multiple duties and have a lot of responsibilities on your plate. This may include compliance management, which is critical for avoiding potentially steep penalties and fines.
In addition to all various compliance management duties that you manage, ACA compliance can be uniquely challenging. Our ACA software and services customers often tell us that managing ACA-related data is cumbersome and a hassle.
It’s important to maintain accurate employee data in order to ensure appropriate offers of coverage and remain compliant. If you are manually tracking data or have multiple companies, accurate data management may be difficult.
If employee hours/statuses fluctuate from part to full-time, utilizing multiple silos or spreadsheets can increase the potential for errors in making offers of coverage. And, penalties can be steep.
Passport Software’s IRS-certified ACA software and services help streamline and simplify the entire process to ensure that you remain compliant. We can help you remain compliant throughout the year, and we provide optional proxy submission for our ACA software customers.
Having your ACA-related data aggregated and organized in one silo helps ensure accuracy year-round, and you can easily retrieve data to effectively respond to an IRS audit.
Creating a routine process for managing ACA employee data monthly helps your company to be better prepared if you receive an IRS warning letter, penalty notification, or audit.
IRS Audit
An IRS ACA audit is a review process that ensures employee information and corresponding ACA data has been reported accurately. If the IRS believes your company to be non-compliant, it may request detailed information to verify non-compliance relating to a penalty notification.
Recently the IRS has been requesting that some ALEs provide their calculations for determining ACA full-time employee and full-time equivalent (FTE) status in order to substantiate the number of 1095-C forms filed.
A full-time equivalent employee is a combination of part-time employee hours equivalent to a full-time employee(s) for the purposes of ALE determination.
If audited, the burden of proof is on your company to verify that your full-time (and full-time equivalents) employee counts were correct for a specific filing year. If you have been manually tracking, using a forms-only solution, or housing data in different silos, it may be difficult to retrieve, aggregate, and verify your data.
It’s crucial to ensure your full-time and full-time equivalent employee counts are correct for each month of the filing year, although 1095-Cs need not be filed for FTEs. Employee counts from the prior year are used for determining ALE status.
Employee Classification
In order to remain compliance under the ACA, verify that you are classifying employees accurately. Ensure that hours-worked information is correct, and monitor this on a monthly basis to ensure accuracy (rather than annually).
Our comprehensive ACA software stores ACA-related data digitally and streamlines both compliance and data retrieval. Monitor employee status changes closely noting new hires, terminated employees, and carefully track hours-worked for staff with fluctuating hours.
Our IRS-certified ACA software and services can help you remain compliant and ease the burden of compliance.
- Passport Software’s comprehensive IRS-certified ACA software streamlines compliance year-round, alerts when offers of covers needed, and helps you ensure those offers are considered affordable under IRS criteria.
- Our ACA Full Service option handles everything for you, including filing – just provide a spreadsheet with employee data, and we do the rest.
- We also provide penalty relief consultation and have helped many companies avoid or drastically reduce penalties.
Passport Software’s US-based customer support is friendly and knowledgeable. We can answer any ACA related questions you may have and help you select an ACA option that is right for your company.
To learn more about how our ACA software and services can help ease the burden of compliance and for pricing, call 800-969-7900. Or, contact us – we are here to help.