“Be prepared” is the theme for every good Boy and Girl Scout, and this is the same lesson we must offer for dealing with an Affordable Care Act audit. There’s no time like the present to line up all the important fiduciary documentation for the employees who may have issues.
Employers, particularly at risk, are those classified by the ACA as an Applicable Large Employer (50+ full-time equivalents). The IRS has created an electronic filing system it calls “AIRS” to understand your data and deal with computerized audits.
Employers may have already begun receiving audit and non-compliance letters from the IRS as early as last month. Employers must prove whether offers of coverage were made and whether they were affordable, first and foremost. In addition, the employer must respond with calculations using one of three determinants — the W2 wage form, the rate of pay or the federal poverty level.
Employers have known for two years audits are mandated and could be expected, but some may find themselves unprepared for what can happen this fall. Regular enforcement of the ACA reporting requirements will result in employer assessments, and those are much respected by the IRS due to the income it generates for the government.
As we enter the audit season, here is some advice you may want to consider:
No. 1: Remember to keep all documentation and records of your system. If you are using PSST’s ACA-Track the procedures are simple for retrieval. From the home page drop-down menu, you can select ACA-Track, Reporting, and then Employee Time Worked Audit Report for any employee in question. While tracking hours is a difficult task when part-time, seasonal and variable-hour employees are part of the mix, ACA-Track makes it easy to deal with these special groups
No. 2: Once you are notified that an audit is coming, create your task force team internally, which may include senior management, legal counsel, benefits administration, your CPA firm, and any special assignees to a response team. Call a live meeting and make sure everyone has a copy of whatever is prepared for submittal to the IRS. IT, finance and payroll staff may need to be engaged in this process of response.
No. 3: Compliance continues, and you must be able to track back to the beginning of the reporting period. This is why an electronic system is important. Keeping ACA-Track records is easy with the PSST toolset.
Check out this ACA informational webinar, “HOT TOPICS for 2016 Affordable Care Act Reporting.” Click here for more information and registration.
