You must do that first if you haven't completed the ACA initial setup (one-time setup instructions), you must do that first.

Until the initial setup is complete, the ACA Reporting section won't show in the Year End menu).

1. Determine if your company is required to do ACA Reporting
2. Determine what forms you will need to file
3. Complete the ACA Company Options Information
4. Run the Error Report to get the total forms needed
5. Order tax forms from PakEnergy Accounting
6. Review the Error Report to correct possible problems with the Employee's ACA Setup.
7. After your forms order comes in, print the employee forms by January 31
8. If you are not filing electronically, print the IRS copies for paper filing by February 28
9. If filing electronically, submit the electronic file by March 31

Note: If you are self-insured, please see the ACA Self-Insured Addendum  

1. Determine if your company is required to do ACA Reporting. 
   There are three essential questions you will need to answer to determine if you are required to do ACA Reporting:
   1. Is your company self-insured? 
      If YES, you are required to do ACA reporting regardless of how many employees you have.
   2. For year 2022 reporting (due in early 2023), did your company [or combined "companies"] average more than 50 employees per month in 2021? 
       
      For 2022, the test would be for the year 2021 (unless you were a start-up company with no employees in 2021, then you would use 2022 data). Pak Accounting provides a handy report that calculates how many employees you had during the prior and current years. On the Year End menu, go to "Reports-ACA", and then #69 Employee Hours Review (this company in this example would NOT have to do ACA Reporting because they are less than 50 in 2021). You are looking for the # at the bottom of the report for "Total FTE (full-time equivalent): 
      • This report computes the average number of FTE/employees per month and also computes the average for the lowest eight months. 
      • There are some provisions for qualifying as seasonal and thus not including the highest 4 months of the year from your average. 
      • This example company would not be required to report for 2022 (filed in early 2023) because it only had 12 full-time equivalent employees in 2021. Two of the employees (Tom Crabtree and Bobby Anderson) were marked part-time in the employee master, but they worked 0.00 hours in 2021, so they do not count toward the total at all. 
        The "Employee Count for 2022" will help you verify the number of employees you will report for the current year and reconcile these totals to your 1094-C form.
        • FT = Full-Time Employee
        • FTW = Full Time Employee, but in the Waiting Period for Insurance
          Note: This report will issue warnings if it finds an employee is working more or fewer hours than you have them classified for in the employee master. For example, on this report in 2022, we are getting an error that Bobby Infante worked 264 hours in December, and he's marked part-time. He may be a full-time employee, and needs to change his status in his employee master. This warning lets you know that you may need to reconsider their part-time/full-time status and change it to match their true work schedule.
   3. Is your company a member of an Aggregated ALE Group?
      If so, ALL companies within the group will need to do ACA reporting, even if they EACH only have a few employees.

IRS Definition of an Aggregated ALE Group (from 1094 Instructions)

https://www.irs.gov/pub/irs-pdf/i109495c.pdf

If your company is NOT part of an Aggregated ALE Group, then with the number of FTE employees safely below 50 and you were not self-insured, you can qualify as being exempt from ACA reporting for 2022. If your averages are above 50 or higher, you are considered an Applicable Large Employer (ALE). This link from the IRS describes in detail how to determine if you are an "ALE": https://www.irs.gov/affordable-care-act/employers/determining-if-an-employer-is-an-applicable-large-employer.

Determine what forms you will need to file.

Depending on if your company is self-insured or group-insured, this chart will help you determine what forms you will need to file:

Complete the ACA Company Options Information

On the Year End Menu: Reports-ACA > Company Options:

General tab

Designated Government Entity: Most of the time you will NOT complete the Designated Government Entity Section (see the IRS instructions) – Do NOT check this box unless you qualify under IRS Guidelines as a "DGE". If you ARE a DGE, then fill out the company information for the DGE.

Certification of Eligibility: Select any of the 4 options which apply to your company. See the IRS Instructions for form 1094-C to determine your selection. If you select "Section 4980H Transition Relief," you must provide a code for the box next to the selection (Code A = 50 to 99 employees, Code B=100+ Employees).

Member of an Aggregated ALE Group: If you are doing ACA Reporting for multiple (aggregate) companies, you must check this box. A new field called "Aggregate Companies" will open at the bottom of the screen. In this box, you can select all the other companies in the aggregate group. These companies will print on page 3 of the 1094 report.

Form 1095-B tab

Enter your company information for form 1095-B.

Run the Error Report to get the total forms needed

On the Year End Menu: Reports-ACA > Error Report: run this report at this point just to get the totals at the bottom of the report to help you order your IRS tax forms for printing the 1094s and 1095s.

If you have less than 10 employees, it is highly recommended that you PRINT the IRS copies and do not file electronically because filing an ACA Application with the IRS to file electronically is extremely complicated. It takes a minimum of 1-2 weeks to complete, and it will be much quicker and easier just to print the forms for the IRS (if you have less than 10 employees).

Now is the time to decide how many forms to order. Three (3) different items affect how many forms you will need:

1. Number forms to print for the Employees (hand out/mail with W-2)
2. Number forms to print for the IRS (same form as employees receive - if you have less than 10, you can print them on paper, which is the suggested alternative)
3. Number forms to print for your office copy
   = TOTAL NUMBER OF FORMS TO ORDER x 110% (suggested 10% extra for alignment & possible printer jams, etc., which can vary by user)
   

You will NOT need to order 1094 forms (this is the summary transmittal page similar to 1096) as this form will print on blank white paper and NOT on a preprinted form!

You cannot print the PDF of these forms from the IRS web page and load them into your printer to print the employee or IRS copies from Pak Accounting. They will NOT line up. The IRS has sample and/or "fill-in" forms on its website for those companies wishing to type and print each form. If you are printing forms in your office from Pak Accounting, you must order official (hard-copy) IRS forms to print on. Pak Accounting guarantees forms purchase from Pak Accounting will work with our software, if you purchase forms from a different provider, we cannot make that guarantee.

In the example below, this company would need to order approximately 2,600 forms for printing to give to the employees (order enough to cover alignment issues and/or printer jam issues). They will need to file electronically for the copies electronically with the IRS. If they wanted an office copy (recommended), they would need to order 2x that amount for a total of 5,200 forms.

Notice the line "Employees with more than 6 dependents." This total is provided so that you can order OVERFLOW forms (page 3) of the form. Employees with more than 6 dependents require an additional (different sheet) that you will need to order. This number should typically be a very small percentage of your employee number.

To reiterate, the IRS will receive the same forms as the employees (i.e., there is no separate form number, nor are they printed on pink "special" paper like the W-2s).

This means if you are printing paper forms to give to the IRS (less than 10 forms and you are NOT filing electronically), you will need to double this number to get the number of forms to order. It is suggested that you order 110% of your actual forms needed to allow for paper jams and possible alignment issues.

Order tax forms needed from Pak Accounting (based on the report above!)

Review the Error Report to correct possible problems with the Employee's ACA Setup:

Review the error report printed above.

This report will compare what is on each employee's already populated "ACA" tab with what is in the change log and the check history records to identify possible problems with employee records that may require manual entry to the ACA tab. To help jog your memory, it will also list changes you have made to the hire and/or term dates in some situations. Any ERROR(s) should be corrected by adding additional entries to the ACA history for that employee.

The "ERROR: Employee received taxable wages with the check(s) dated…." is the most common error that will be encountered. This will typically result from the employee having multiple hire/term dates that need to be recorded for ACA purposes. These additional hire/term dates must be manually added to the employee's ACA history. In the future, as employees are rehired and re-terminated, the ACA history should be automatically updated.

The system logs hire/term date changes that might be relevant to the employee's actual employment history. Some of the entries listed might be from erroneous changes that were later corrected, so they can be ignored if the employee's hire and term dates are correct.

If ACA history is manually entered or changed, it is possible to introduce other types of errors, such as multiple hire dates with a termination date in between, etc. The error listing will catch these types of errors and report them.

EXAMPLE

A great place to quickly review what changes have occurred to an employee's master record is to click on the "View Change History" button in Employee Master Maintenance, and you can see the changes made on this record:

The "View Change History" button can provide information as to who changed what on the employee master. In this example we can see that this employee had multiple instances of being hired, terminated, and then rehired.

This employee above, Harold Rothchild, had the following employment history:

01/01/2012 thru 01/03/2022, 03/15/2022 thru 06/20/2022, then 10/12/2022 thru Current

His ACA tab was automatically populated as follows:

What are other codes you might have to add manually?

The first 4 codes on this list should basically be automatically populating for you based on the employee master, for example: if you hire a part-time employee and mark them as "part-time" on the Name/Addr tab, it should automatically fill in the Hired & Not Eligible (Part-Time) Action Code. The system should know these 1st 4 codes and automatically use them!

The next 7 codes are not automatic because they are considered unusual circumstances. If you need these codes, you will have to add them manually.

1. Declined Coverage—If you have an employee to whom you have offered insurance coverage and who has chosen not to take that coverage (for example, they are covered under their spouse's plan), you will need to add an action code for declined coverage. This entry should have an effective date AFTER the Waiting Period is Complete, NOT before.
2. Hired & Excluded from Insurance – If you have some employees you do not offer insurance to, you would use this code in place of the Hired & Eligible (Waiting Period) action code, and you would need to delete the automatic Waiting Period Complete code. Warning: It can be a dangerous practice not to offer insurance coverage to ALL your employees. The IRS refers to this as a discriminatory plan and may impose penalties at some point for doing so.
3. Non Full-Time Employee Coverage Began – ONLY used typically for self-insured companies who offer insurance coverage to their part-time employees! Normally, part-time employees are not reported to the IRS. Use of this code will cause an exception to that behavior and WILL report part-time employees IF they have coverage. This code is for the effective date that the coverage begins.
4. Non-Full-Time Employee Coverage Stopped—This code is ONLY used in conjunction with the code above and is used when the part-time employee has stopped their coverage. You will not use this code unless you have already used the code above where it Began! Enter the effective date that their insurance coverage stopped.
5. Start COBRA – Employee AND Covered Dependents – If you have an employee who has terminated and elected COBRA coverage for both themselves AND their dependents, you will use this code to set the effective date for the COBRA coverage. If ONLY the employee is electing coverage, you will still use this code, BUT you can turn on or off each dependent's coverage dates on their dependent tab (turn off via effective date). For a non-self-insured company, this employee will only be reported through the year of termination. For a self-insured company, this employee will continue to be reported for any subsequent years the employee has insurance coverage (dependent section).
6. COBRA Coverage Ended – This is ONLY used in conjunction with the TWO COBRA codes and is used when the COBRA insurance coverage has terminated. You will not use this code unless you have already used one of the two Start COBRA codes! Enter the effective date that their insurance coverage stopped.
7. Start COBRA – Covered Dependents ONLY – If you have an employee who has terminated and is ONLY electing COBRA coverage for one or more of their dependents and NOT themselves, then you will use this code to set the effective date of the COBRA coverage. For a non-self-insured company, this employee will only be reported through the year of termination. For a self-insured company, the dependent coverage will continue to be reported for any subsequent years they have insurance coverage (dependent section). If only ONE of the dependents will be covered and not the OTHER dependents, you'll be able to put the dates of coverage for each dependent in the "Dependents" tab.

After your forms order comes in, print the employee forms by January 31

On the Year End Menu/Reports-ACA/, Go to the option IRS 1095 Report. This report MUST be printed on preprinted forms; if you view the form to screen, the information will not have much value to you without the preprinted information being visible. Print one page of the form first on blank paper to work on the alignment of the forms with your individual printer using the horizontal and vertical adjustment decimals. If you are NOT self-insured, the only report you will need to print from this screen is the 1095-C (see the chart in Step #3 above) for the employees.

It is HIGHLY recommended you include these forms in the distribution of the employee's W-2 forms (even if the government gives an extension of time). Currently there is not an envelope available for ONLY the 1095. This makes it very impractical to distribute the 1095 to the employee by itself.

The codes used for Offer of Coverage and Safe Harbor are based on the employee events that occurred on the Employee Master (See the IRS Instructions for Form 1095 for details on these codes and their meaning). You can also see the "Example" section at the end of the Help file to see how various events affect codes on this report.

This form should look similar to this (in this example, the employee pays 0.00 for their insurance coverage):

If you are not filing electronically, print the IRS copies for paper filing by February 28.

You will print the same forms for the employees you printed in the above step, but you will also need to print the 1094 (Transmittal form) and send it to the IRS. The 1094 form can also be found on the Year End/Reports-ACA menu under the IRS 1094 Report.

On this report, simply select which form to print and it will print on BLANK PAPER, do not load a preprinted form!

• Select 1094-C if: Company was NOT Self-Insured (i.e., Group Insured) or Company was Self-Insured and Over 50 Employees.
• Select 1094-B if: You are Self-Insured and have Less than 50 Employees.

On lines 18 and 20 of the 1094-C, where the total number of forms is reported for this company, those two numbers will ALWAYS be the same count. Pak Accounting does not support multiple batches of 1095/1094 forms to the IRS. Each company should only submit one batch for reporting purposes.

The 1094-C will look similar to (this example company would not have to report in 2022 because they do not have 50 employees, but this is for illustrative purposes only). This example company has 1 aggregate company they are associated with:

If filing electronically, submit the electronic file by March 31.

You must register with the IRS to file your forms electronically! This process will take a minimum of 1 week to complete so do not wait until the last week of March to complete this step!

After you are approved to submit forms electronically, create the electronic file from within Pak Accounting by going to the Year End Menu/Reports-ACA/IRS 1094/1095 Electronic File. Select either 1094-C or 1094-B and click "OK".

The file will be created and stored in the following location: \GLN32\Company\EDI\ACATransmittal1095C_2015.xml.

Follow IRS instructions for submitting this file to the IRS "AIR" System via their website.

Congratulations!! You are now done filing for ACA for another year!!!

NOW WHAT??

Please be mindful that the ACA is not something you can only think about at the end of the year. The new ACA rules will require careful monitoring throughout the year to maintain your ACA records for reporting next year!

It is important that you keep a watchful eye on the Employee's ACA Tab and Dependents Tab (if self-insured).

The system should automatically track for you the hired, waiting period complete, and termination codes for you, but please check these throughout the year. There are some codes that will always have to be manually added because they are "unusual" circumstances and seldom used:

If you are self-insured, you will need to track your Dependents Coverage throughout the year as dependents are added and dropped!

"Declined Coverage"

"Hired & Excluded from Insurance"

"Non Full-Time Employee Coverage"

"Non-Employee Coverage – COBRA"

Most Common Examples:

LESS Common Examples: