Why Brokers Need To Partner With An ACA Compliance Tool

Lindsay Morton • 30 March 2023

Offer Clients Peace of Mind by Adding ACA Compliance to your Client Offering

As a broker, you have a crucial role in ensuring your clients' compliance with the Affordable Care Act (ACA). However, navigating the complexities and ongoing changes to the ACA regulations can be challenging. Fortunately, there are ACA compliance solutions that can help streamline the compliance process for you and your clients.


What is an ACA Compliance Solution?


An ACA compliance solution is a software tool that provides your clients with the necessary resources and tools to stay compliant with the ACA regulations. The solution may include an online portal that enables clients to upload required data, monitor their compliance status, and generate essential reports.


As a broker, you also benefit from the ACA compliance solution. The solution should offer you the ability to monitor your clients' compliance status and receive alerts in case of any compliance issues. This way, you can proactively address any potential compliance concerns before they become bigger problems.


Why is ACA Compliance Important for Insurance Brokers?

The Affordable Care Act (ACA) was enacted in 2010 and is crucial for brokers who specialize in group health insurance. This is due to the Employer Mandate, which requires Applicable Large Employers (ALE) with 50 or more full-time employees or equivalents to offer affordable health insurance that meets minimum value standards to at least 95% of their full-time employees and dependent children up to age 26.


For health insurance to be considered affordable, an employee's contribution for employee-only coverage should not exceed 9.83% of their household income in 2021. A plan meets the minimum value requirement if it covers at least 60% of the cost of covered services such as deductibles, copays, and coinsurance.


Non-compliance with the ACA can result in penalties from the IRS, which may exceed $200 billion for liable ALEs over the next decade. This is why many employers seek guidance from their benefits advisor to ensure they comply with the law.


Since the Employer Mandate was introduced in 2015, ALEs have relied on their brokers for advice, updates, strategies, and technology to stay compliant. Brokers play a critical role in helping ALEs complete ACA reporting and ensure they offer affordable health coverage that meets minimum value standards.


Non-compliance with ACA reporting can result in employers receiving Letter 5699, and failing to comply with the Employer Mandate can lead to a proposed assessment via Letter 226J. The stakes are high, and brokers must be prepared to assist clients with responding or refuting the IRS's claims. In some cases, ALEs may even expect brokers to share the financial burden of non-compliance.



Reposition Your Relationship From Broker To Trusted Advisor 


To prove compliance with the ACA, your groups must file 1094-C and 1095-C forms with the IRS for every qualifying employee. However, this process is time-consuming and prone to human error, which can lead to costly IRS fees. Luckily, ACA compliance solutions can help streamline the reporting process, reduce manual workload, and ensure your groups remain compliant.


With an ACA compliance solution, your groups can determine their ALE status, track their variable hour employees, prove affordability, generate the necessary forms, and submit or e-file the required forms to both employees and the IRS.


While some third-party companies offer full-service solutions for your clients' filings, maintaining in-house ACA reporting can help you build long-term, consultative relationships with your clients and establish yourself as their trusted partner. By introducing an ACA compliance solution as an add-on tool to their benefits administration software, you can offer a valuable solution that saves your clients time and money, while ensuring their compliance with the ACA.

Rising Trend Of Identity Fraud in Unemployment Claims: How To Protect Yourself

by Jamie Darder • 30 March 2023
The occurrence of Unemployment Identity Fraud is increasing rapidly . This type of fraud involves the use of someone else’s personal information by criminals to unlawfully receive unemployment benefits. This fraudulent activity is often referred to as “Claim Hijacking” or “Claim/Account Takeover,” where the fraudsters use stolen information to log into the victim’s unemployment account and steal their rightful benefits. Individuals who are victims of unemployment identity fraud may only become aware of the situation when they receive unexpected mail, such as a notice from a state unemployment agency or a state-issued 1099-G tax form, which reports unemployment benefits that they never requested or received. In some cases, those who have filed for unemployment benefits may realize that they have fallen victim to “Claim Hijacking” or “Claim/Account Takeover” when they suddenly stop receiving their payments, and they notice that the bank account or address information on their unemployment claim has been altered without their consent.

How to Respond to IRS Letter 226J

by Lindsay Morton • 30 March 2023
What is a letter 226-J Letter? A Letter 226-J is the initial letter issued to Applicable Large Employers (ALEs) to notify them that they may be liable for an Employer Shared Responsibility Payment (ESRP). The determination of whether an ALE may be liable for an ESRP and the amount of the proposed ESRP in Letter 226-J are based on information from Forms 1094-C and 1095-C filed by the ALE and the individual income tax returns filed by the ALEs employees.

Understanding Why Unemployment Benefits Are Denied: Common Reasons Explained

by Jamie Darder • 30 March 2023
What is unemployment insurance? Unemployment insurance provides financial assistance to individuals who lose their jobs through no fault of their own. In accordance with federal guidelines, every state offers unemployment insurance benefits to eligible individuals. However, not all unemployed individuals qualify for these benefits. It is the responsibility of the employer to inform the state whether or not an unemployment insurance claim is warranted. What qualifies a terminated employee to receive unemployment insurance? Employers pay into the federal and state unemployment insurance funds, which are used to provide financial support to eligible individuals requesting the unemployment insurance benefit. Eligibility for UI benefits can be established in several ways, such as in cases of company reorganization, job redundancy, or seasonal or temporary employment contracts ending. If an employer reduces an employee's hours or a temporary layoff is caused by a natural disaster, the employee may also qualify for UI benefits. What disqualifies terminated employee? Nonetheless, some individuals may not be eligible for unemployment insurance. For example, the length of an individual's employment with a company and their earnings during that time can disqualify them. Additionally, non-W2 employees, such as contractors or freelancers, are not eligible for UI benefits through the employers they have serviced. When an individual applies for UI benefits, the state agency reviews their application and may automatically deny benefits based on the individual's employment history, earnings, and type of employment. There are also cases where individuals may not qualify for UI benefits, such as voluntarily leaving their job or being terminated due to misconduct. In such cases, employers need to address state claims requests that they believe do not qualify for UI benefits. Employers must recognize that UI claims are not just "the cost of doing business." An employer's UI tax rate is the only tax rate that can be controlled by responding to state claims. Over time, the payout of UI claims to former employees can raise an employer's UI tax rate, which can affect the businesses bottom line. Thus, effective claims management is critical. A team of UI claims management specialists can help employers stay compliant with state nuances, protect their bottom line, and focus on their present employees.
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