By now, you have probably heard about the ramifications of the Affordable Care Act and how it will affect the average employer. Of particular note are a number of new healthcare reporting requirements that are needed to assist in the enforcement of the various health coverage requirements that will be required of employers effective January 2015.
Sage Software has released a terrific solution for your ACA analysis and reporting needs, My Workforce Analyzer (MWA). You now have the ability to conveniently and affordably abide by ACA reporting requirements and make decisions with confidence. MWA is delivered as a module within your Sage HRMS or Sage Abra Suite solution and can help you manage employer-sponsored healthcare and stay compliant with government regulations, analyze your employee hours to determine if you qualify as a large employer, determine if coverage is affordable, explore the pay-or-play decision, examine employee time required to monitor and manage part-time and full-time eligibility, and generate the reports mandated by the IRS, specifically the 1094-C and 1095-C. More on MWA later.
This article is written to not only introduce you to and answer questions regarding MWA, but to walk you through the basics of ACA regulations and reporting at a high level.
ACA, ALE, FTE, FPL, MWA… OMG! What do all the letters mean?
The Patient Protection and Affordable Care Act (PPACA) – also known as the Affordable Care Act or ACA, and generally referred to as Obamacare – is the landmark health reform legislation passed by the 111th Congress and signed into law by President Barack Obama in March 2010. The legislation includes a long list of health-related provisions that began taking effect in 2010 and will “continue to be rolled out over the next four years.” Key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include rescission and denial of coverage due to pre-existing conditions.
A full-time equivalent (FTE) is defined as part-time employees whose combined hours add up to 120/mo. For example, two PT employees who each work 60 hours/month = 1 FTE.
The ACA solution for Sage HRMS and Sage Abra Suite clients
Employer Shared Responsibility Provision
Employer Shared Responsibility Payment
If you have fewer than 50 full-time or FTE employees, your company isn’t required to provide healthcare benefits and will not be subject to penalties or filing requirements. In companies with 50 or more full-time or FTE employees, you may choose to offer benefits that conform to provisions in the Affordable Care Act, such as affordability and minimum value coverage, or face penalties if a full-time employee receives subsidized coverage through an exchange. Certain transitional rules are currently in place (through 2015) for companies with 50-99 full-time or FTE employees and also for those with 100 or more full-time or FTE employees.
ALE’s also have information reporting responsibilities regarding minimum essential coverage offered to employees. These responsibilities require employers to send reports to employees and to the IRS on new forms the IRS created for this purpose. This is where Sage My Workforce Analyzer (MWA) can help . The IRS will use this information to administer the employer shared responsibility provisions and the premium tax credit.
ALE members must file Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, and Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, with the IRS annually, no later than February 28 (March 31 if filed electronically) of the year immediately following the calendar year to which the return relates.
Also, ALE members are required to furnish a statement to each full-time employee that includes the same information provided to the IRS, by January 31 of the calendar year following the calendar year for which the information relates. Form 1095-C filed with the IRS must be furnished to each full-time employee on paper by mail, unless the recipient affirmatively consents to receive the statement in an electronic format. The requirement for affirmative consent to receive the statement in electronic format ensures that statements are furnished electronically only to individuals who are able to access them. An individual may consent on paper or electronically. If consent is on paper, the individual must confirm the consent electronically. Employees may use this information to determine whether, for each month of the calendar year, they may claim the premium tax credit on their individual income tax returns.
ALE’s are required to report to the IRS, as well as to their full-time employees, regardless of whether the ALE actually offers health insurance coverage. Even if an ALE with at least 50 but fewer than 100 full-time employees (including full-time equivalents) is eligible for the transition relief for 2015 from the employer shared responsibility provision, the ALE is still required to complete the information reporting for 2015. For those ALE’s that file 250 or more information returns during the calendar year, they must file the returns electronically.
Keep in mind that penalties will be assessed for noncompliance.
Make no mistake, there’s a lot of work ahead for HR professionals and benefits managers in order to comply fully with the Affordable Care Act. A Human Resources Management System (HRMS) that is designed to centralize HR and benefits information so you can easily access the data you need for compliance and decision making and includes a component to automate the ACA regulations and reporting is essential.
Sage HRMS My Workforce Analyzer (MWA) is a tool that Sage Software first brought to market in early 2014 utilizing their web portal, Sage Source. At that time, MWA was more of an analysis tool versus a reporting tool because reporting requirements hadn’t been established yet. Although MWA provided some valuable information, it wasn’t robust enough for what is needed today. The tool was offered at an annual subscription cost with minimal “implementation” needed and provided some value to those that took advantage of it.
Fast forward to 2015 when the final regulations and reporting requirements have been determined. Sage Software stepped up and reworked the MWA tool, incorporating:
MWA is an additional module that is added in to your current Sage HRMS or Sage Abra Suite solution. It uses data from your company to address specific questions and concerns, produce online dashboards, generate required forms, and help keep you compliant well ahead of deadlines so you can avoid stress and penalties. It utilizes both payroll and HR related information for analysis and population of the 1094-C and 1095-C reports, although not all sections of these reports are currently automated. Sage has committed to having the forms fully automated by mid-summer.
Depending on how your current system is set up and what version you are on will impact the implementation time/cost required to get you up and running. Although the reporting requirement for 2015 has an early 2016 due date, many companies are looking to be up and running well in advance so they can begin looking at the financial impact their benefit plan decisions will have on the organization – does it make sense to offer insurance or pay the penalty, do the plans offered meet the affordability requirements, do they offer value to the employees, etc.
In order to use MWA effectively, you will need to be on the latest version of Sage HRMS or Abra Suite (2015 or 9.2 respectively); have your medical benefit plans set up correctly, including effective and expiration dates; and have access to accurate dependent data. If any of these components aren’t currently available, the information can be gathered and imported or entered during implementation.
MWA is currently available at no charge for the software and support for all clients that are on a Sage Gold Business Care plan, however we do strongly recommend implementation be completed by one of our CS3 Technology certified team members in order to achieve the desired result. If you decide to reduce your Gold support plan to the Silver option, the current cost of the software/support will be incurred. If you are on a Sage Silver Business Care plan, MWA can be purchased and implemented at a fixed fee, 100% money back guarantee through CS3 Technology as well. For clients that exceed the 250 employee threshold, electronic filing will be available through Aatrix and fully integrated with MWA. For those of you how took advantage of purchasing the earlier version of MWA, you will be “grandfathered” in to the newest version and new unlock codes will be provided at no charge.
Sage HRMS can ease the burden of implementing the Affordable Care Act by helping you:
Perform open enrollment more quickly and with less expense. Online benefits enrollment functionality enables employees to choose the benefits packages they want on a secure website. An HRMS can track the status of enrollment and report on results.
Photo by rawpixel on Unsplash
Sheri Blaho is the Director of Marketing for CS3 Technology. Her education as an accountant combined with her years of system design and programming gives her a unique perspective that is a great advantage for all customers. While primarily focused on HR, Payroll and Time Collection systems, she can answer questions regarding ERP solutions too.
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