AUG 2016 ISSUE: BENEFITS MAGAZINE
"1095 Reporting—What You Don’t Know
Could Be Expensive"
by Howard M. Gerver
President of ACA Managed Services
Employers that failed to file or made errors on Forms 1095-C to every employee and 1094 submissions to IRS face stiff penalties. This article describes likely IRS audit red flags and potential risks in three areas.
Are You Concerned About Your 1094 and 1095 Submitted Data?
We'd like to introduce you to ACA Managed Services and our audit service practice.
The good news is your 1095s for 2015 are done, congratulations! While your 1095s are behind you, every once in a while your mind may meander into an ominous space. You’re not alone.
Given the ambiguity of the regulations, the high fines and penalties for non-compliance, questionable data completeness and accuracy and new ACA IRS technology, the risk for fines and/or penalties for 2016 reports is high. Along with high penalties and fines also potentially comes another threat – the loss of your job. In spite of these threats many professionals perceive 2015 as a test year. In essence, the IRS will look the other way as long as “best efforts” were used.
While some of this is true, employers need to keep in mind the IRS has hired thousands of agents to enforce the ACA. Employers also need to keep in mind that the Federal government has budgeted billions of dollars in fines and penalties every year for the next 10 years.
In the spirit of Dirty Harry – you may want to ask the following. “Do you feel lucky – did I shoot only 5 shots or 6, well do ya?” Even though no one is getting shot here, metaphorically speaking do you really have 100% confidence your 1095s are correct. Are you prepared up to $250 for each missing or incorrect form? Only you know the answer. If you’re conservative and want to mitigate your risks, you may want to strongly consider a 1095 audit.
It’s really quite simple –
- The regulations are complicated
- ACA IRS reporting is new
- Fines and penalties are very high
- Vendors haven’t audited their own products
- There are many moving parts
- Your job could be at risk
Since your employer/vendor just recently processed these forms the information should be readily available. If you’re seeking a sample-based audit, our sample audit report can be delivered in less than 4 weeks. If you’re seeking a 100% data compare audit, than this will likely take more time unless all of the data can be furnished right away.
That all depends upon the comprehensive nature and integrity of your data and well as the importance of quality assurance to your 1095 vendor or software company that is producing your forms.
Given the complexity of ACA IRS reporting you really need a specialist that understands all the nuances of the regulations.
1095 Audit, a service of ACA Managed Services
795 Franklin Avenue
Franklin Lakes, NJ 07417