Many errors are being noted as a result of the e-files loaded through the new AIR IRS system. We also expect error reports for paper filers as well. Errors are common it seems as all the TPA's that we have spoken too as well as the IRS confirm that the AIR system's validation has many faults and often the IRS data itself is out of date or just plain wrong.
The "Good Faith Filing Standard" which is the standard for 2015 ACA Reporting means that errors that are noted should be corrected if possible and obvious but NO deadline to do so has been communicated. If there are errors in the paper or e-file, Source documents need to be reviewed and placed in good order. Source documents would be the I-9 Form and supporting documents, original insurance enrollment forms completed by the employee ... etc. Again, just because there is an error, does NOT mean that records that were used for reporting are necessarily wrong ... just different from what the AIR system has to match to the record loaded. There is NO guidance on what steps to take IF the information sent to the IRS matches current employer records. "Honest" differences could be incomplete names changes after marriage or divorce, hyphenated last names, dates of birth transposed, name spelling, etc. Problems could occur when employees have provided fake ID's including "bought" Social Security Cards.
Remember one more thing. We are dealing with the IRS and a new area of employment law. Under the theory of American employment law, the employer is considered "guilty" and has the burden of proof for innocence. That is precisely why good documentation is so very important.
Employees that were offered "Affordable Coverage" by their employer were NOT supposed to get subsidized plans from the Marketplace. Many did for the simple economics that the standard for "affordability" for employers was 9.5% for SINGLE coverage and the Marketplace subsidy is for any tier up to and including family coverage ... on the Silver Plan level. Practically speaking, many employees were faced with the cost of Single Coverage that was offered by their employer that was "affordable" costing about the same as Marketplace family premium IF it was subsidized. All the employee had to do was claim that the employer coverage was "not affordable". In these cases, at least initially, the employer is most likely to get a penalty letter from the IRS because an employee listed on the ACA filing as having been offered "affordable coverage" received a subsidy ... and the employer must pay a penalty. Ouch. Employers will have 90 days to appeal and having proof that the Marketplace letters were sent to the employees will be paramount in getting this penalty abated.
Thanks for trusting our staff to assist with your compliance efforts.
The "Good Faith Filing Standard" which is the standard for 2015 ACA Reporting means that errors that are noted should be corrected if possible and obvious but NO deadline to do so has been communicated. If there are errors in the paper or e-file, Source documents need to be reviewed and placed in good order. Source documents would be the I-9 Form and supporting documents, original insurance enrollment forms completed by the employee ... etc. Again, just because there is an error, does NOT mean that records that were used for reporting are necessarily wrong ... just different from what the AIR system has to match to the record loaded. There is NO guidance on what steps to take IF the information sent to the IRS matches current employer records. "Honest" differences could be incomplete names changes after marriage or divorce, hyphenated last names, dates of birth transposed, name spelling, etc. Problems could occur when employees have provided fake ID's including "bought" Social Security Cards.
Remember one more thing. We are dealing with the IRS and a new area of employment law. Under the theory of American employment law, the employer is considered "guilty" and has the burden of proof for innocence. That is precisely why good documentation is so very important.
Employees that were offered "Affordable Coverage" by their employer were NOT supposed to get subsidized plans from the Marketplace. Many did for the simple economics that the standard for "affordability" for employers was 9.5% for SINGLE coverage and the Marketplace subsidy is for any tier up to and including family coverage ... on the Silver Plan level. Practically speaking, many employees were faced with the cost of Single Coverage that was offered by their employer that was "affordable" costing about the same as Marketplace family premium IF it was subsidized. All the employee had to do was claim that the employer coverage was "not affordable". In these cases, at least initially, the employer is most likely to get a penalty letter from the IRS because an employee listed on the ACA filing as having been offered "affordable coverage" received a subsidy ... and the employer must pay a penalty. Ouch. Employers will have 90 days to appeal and having proof that the Marketplace letters were sent to the employees will be paramount in getting this penalty abated.
Thanks for trusting our staff to assist with your compliance efforts.
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