This blog was last updated on June 27, 2021
Tax information reporting under the Affordable Care Act (ACA) is understandably confusing. There are new obligations, and many internal stakeholders within an organization could be seen as responsible for some part of the ACA reporting process.
There are a lot of new forms that need to be processed and mailed. Some of these forms include the following: Form 1095-A is for individuals who purchase health insurance via the marketplace, Form 1095-B is for those who purchase coverage from insurers and Form 1095-C is for employees who are covered by their self-insured employer. However, there are few clues as to who is responsible for ACA reporting.
There are four departments that could be expected to handle tax reporting under the ACA:
- Human resources (HR): Although this department is responsible for managing employee health plans, they are not responsible for non-wage tax information reporting.
- Member services: These professionals are regularly answering calls from clients who have questions about their health insurance plans. Of course, this department is the first place many will turn for ACA reporting assistance, but these professionals aren’t trained in tax compliance or familiar with the reporting regulations of the ACA.
- Compliance accounting: While this department has the compliance expertise, it lacks knowledge regarding health care coverage.
- Information technology (IT): The transmission of data for ACA reporting requires database management expertise to ensure the security and uninhibited transfer of data. Yet, IT professionals are not trained in compliance or health benefits.
So, who’s responsible for ACA reporting?
Companies in the health insurance industry have varying opinions on the answer to that question. According to a March survey of health insurance providers conducted by Convey Compliance Systems Inc., the majority of respondents – 39 percent – point to the HR/benefits department. Eighteen percent suggested the accounting and finance departments are responsible for ACA reporting, 16 percent said tax operations and only 2 percent recommended IT for the task. The remaining 25 percent were still deciding or suggested another department.
With the ACA reporting timeline moving forward, organizations need to get their ACA reporting solution locked in soon.
Luckily, there is an option that does not create additional operational demands for any single department or saddle one department with such a large task. Instead of stressing over who’s responsible and interrupting other critical business operations, companies can contract their ACA reporting needs to a third-party vendor that understands the health care law and its regulations.
Check out our new infographic which highlights the organizational confusion caused by the new ACA reporting obligations. For more about ACA reporting requirements for marketplaces, insurers and self-insured employers, visit our education section.
