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Payroll’s Process toward ACA Compliance

HealthcareIn our continuing series of blog posts about integrating the ACA in business practices, so far we’ve taken a look at how information technology, human resources and finance departments may be affected. The payroll department also plays an important role in ACA compliance.

Payroll and timekeeping are often particularly difficult to manage because of the many administrative adjustments that are typically made over time. Accurately managing these processes is a key factor in helping employers avoid penalties under the ACA’s Employer Shared Responsibility provisions. The payroll department may be responsible for reporting employee data records to the Internal Revenue Service (IRS), tracking employees’ work status and monitoring employee wage payments. The payroll department will need to ensure that pay information is accurate and available to apply needed ACA calculations.

Airtight payroll processing also helps ensure that the necessary healthcare is offered to ACA-eligible employees in accordance with your company’s ACA strategy. Payroll may be responsible for measurement calculations sourced from pay data that determine employee eligibility to be offered coverage under the ACA. Teams must also keep up with ACA reporting requirements (especially health insurance data for Forms W-2) and accurately process each employee’s pay to ensure they comply with the additional Medicare tax requirement and reporting, limits of Health FSA Contributions, and accurate taxation when issuing Medical Loss Ratio Rebates (MLR).

For more information on how the ACA may affect corporate payroll departments, download “ACA Compliance – Whose Job is it, Anyway?

 

Learn More about ADP Health Compliance

 



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