The moment of truth is soon approaching. After years of delays, the reporting requirements mandated by the Affordable Care Act (ACA) for large companies went into effect in 2015, and deadlines loom early next year for filing 1095 and 1094 forms.
As a result, companies preparing to process these forms internally and with the IRS are beginning to realize the size of the task at hand. While similar to traditional forms such as the W-2 and 1099, 1095s and 1094s come with their own set of complications pertaining to healthcare coverage of employees. For each employee, companies must document coverage, coverage offered, COBRA utilization, hours worked, start dates, and a number of other data points. Because this information often is handled by different departments within a company, it’s not uncommon that companies are reaching for the panic button.
The answer for many is to increase the synergy between payroll and benefits operations. Whether those are handled in-house, or sourced to third-party brokers or firms, it’s now nearly essential for any mid-sized or large employer to coordinate them more effectively.
While this would seem an obvious solution, actual implementation is more challenging. Companies are faced with a spectrum of service decisions, ranging from using in-house software with little support, to full-scale outsourcing of payroll and benefits to companies claiming to be proficient at both.
At Creative Benefits, we believe the best approach for most companies lies somewhere in the middle. Small to medium-sized employers may have the resources to handle 1095 and 1094 reporting with the aid of a single piece of software, but the ACA formulas can be confusing and a single error by a learn-as-you-go HR professional could lead to costly penalties.
In addition, many new companies providing bundled services have appeared and many existing companies have expanded their benefit departments to meet the needs. It is unlikely, however, that they will ever match the expertise of established brokers and payroll firms.
The middle ground solution is for established benefits and payroll firms to build synergy with one another. At Creative Benefits, we have positioned our services to meet this approach. While we have maintained our focus on providing the best possible benefit solutions to our clients, we have also invested in software systems such as BenXpress to better track and report data in accordance with healthcare requirements.
Such systems also allow us to synthesize data with payroll departments or companies to the unique degree that each company requires. With some clients, we simply provide better information-sharing to their in-house payroll departments. With others, we coordinate with other outside vendors to handle all reporting requirements, including mailing forms to employees’ homes.
Before companies decide to handle 1095 and 1094 reporting requirements in-house, or shift responsibilities to a single-solution company, they should consider whether increased synergy between their existing payroll and benefit providers may be the safer, better-valued investment.
About the authors:
Bernadette O’Neill is the Vice President of Finance at Creative Benefits, Inc. and holds more than 20 years’ experience in the healthcare industry. Her years of experience have allowed her to develop a deep understanding of the actuarial sciences involved in case planning. This unique skill set helps Bernadette perform deep financial analysis, allowing CBI to offer our clients creative and alternative funding strategies for their healthcare programs.
Christine Henry is a Benefits Consultant and Senior Account Manager at Creative Benefits, Inc. holding more than 10 years’ experience as a health benefits consultant. Christine has assumed the lead role on several large accounts as the account manager, overseeing annual renewals and daily support activities. In addition to her role as Sr. Account Manager, she works as a Benefits Consultant with several new clients. Christine brings deep industry knowledge and relationships with key carriers to her client partners in designing cost contained and comprehensive benefits programs.