ACA State Filing
Have you received a 1095-C form before? This form is generated as a result of your employer fulfilling the annual ACA state filing required by the IRS.
So what is ACA state filing? This practice refers to the reporting requirements related to the Affordable Care Act (ACA) at the state level in the United States. ACA State Filing includes provisions requiring employers and health insurance providers to report certain information to the Internal Revenue Service (IRS) and to specific individual states.
Under ACA State Filing, employers and insurance providers must report details about the health coverage they offer to employees and individuals. This reporting is used to ensure compliance with the ACA's individual mandate and to verify individuals have the required minimum essential health coverage.
With this quick summary out of the way, let’s dive into how ACA filing is done in Workday.
If you are brand new to filing within Workday or have used Workday previously and need to update for the new year, most (not all) of the following steps need to be completed each year.
1. Define Plan Information: Ensure all health plan and coverage information is accurately defined in your Workday system. This includes plan details, plan types, employee contributions, and other relevant data.
2. Configure/Update Worker Eligibility Rules: Define the criteria that will determine whether an employee is eligible for health coverage under ACA. Workday allows you to create eligibility rules based on factors like hours worked, employment status and other criteria.
3. Data Collection: You'll need to collect the relevant data from your employees and other relevant sources, such as payroll, to determine which employees are eligible for ACA reporting. Workday should be configured to capture this data accurately.
4. ACA Configuration: Set up the ACA reporting configuration in Workday. This includes configuring Workday to generate the necessary ACA forms, such as Forms 1094-C and 1095-C, which are required for IRS reporting.
Workday Tasks to be performed (in order):
Affordable Care Reporting Configuration task
Tips: Be sure to double-check to ensure the lookback period is correct per the benefits team.
Reminder: Update Federal Poverty levels *may not be applicable to every company*
Create Benefit Eligibility Rule > ACA 4980H Safe Harbor Eligibility Rule
Tip: We suggest making a rule (Active Status = Y)
Reminder: This setup will be used in step 3.
Create ACA 4980H Safe Harbor Configuration (If applicable)
Example: Federal Poverty Line Safe Harbor
Create ACA ALE Group task
Reminder: Add Company + all months which are applicable
Create Benefit Eligibility Rule > ACA 1095-C Tuning Eligibility Rule
Example: Rule to pull contractors and workers not located within the United States (this is used as an exclusion rule).
Create ACA 1094-C Company Configuration Task
Reminder: Add your exclusion rule made in the step above
Calculate 1094-C Total and Full Time Employee Counts by Month Task
Reminder: This will generate employee counts for 1094/1095C
Create ACA 1095-C/1094-C Data Task
5. Testing: Before you submit your ACA reports to the IRS, it's crucial to perform thorough testing to ensure the data is accurate and the reports are generated correctly. Workday allows you to generate test reports for validation. You may use the “View ACA 1094-C Form Data” and “View ACA 1095-C Form Data” tasks to preview data.
6. Generate and Distribute Forms: Once testing is successful, you can generate the actual ACA forms. You can generate forms manually or via 3rd party.
Create ACA 1095-C Forms Task
Reminder: This will generate the batch for printing vendor.
View ACA 1094-C Form Data Task
Ask filing vender if this is required
View 1095-C Form Recipient Data Task
Ask filing vender if this is required
Workday provides the capability to distribute the necessary forms to employees and file them with the IRS.
7. Ongoing Compliance: ACA compliance is an ongoing process. You should be monitoring and tracking changes in employee status, coverage, and other factors to ensure ongoing compliance within your Workday tenant.
8. Stay Informed: Keep up to date with changes in ACA regulations, as they can evolve over time. Workday may release updates to accommodate new ACA requirements (Safe Harbor).
9. Document Retention: Ensure you retain records and reports related to ACA compliance for the required time period. The IRS typically requires you to keep ACA records for at least three years.
The good news is that Workday supports third-party ACA Filing, which makes filing easier and more efficient. One of Workday’s tech partners, Experian Employer Services, offers a complete ACA Filing Integration.
History of the Experian Employer Services Integration:
The Experian Employer Services integration was previously a mailing connector with a supplemental studio integration. Now, Experian offers a new integration using delivered WD toolsets to reduce technical complexity and remain in line with delivered solutions.
When using the Experian Employer Service’s Integration we recommend:
Planning your resources early. This setup takes some time to do, although the guide is helpful. Do not push this to the last minute, because you need to leave enough time for testing. Read the specifications early to make sure you have no questions or confusion about what needs to be done.
Strategize around your benefits configuration early. You cannot successfully integrate poor configuration or bad data.
Get in touch with Experian Employer Services ASAP to confirm their readiness and schedule the engagement.
Experian Employer Services
In addition to Experian’s ACA Reporting Integration with Workday Benefits, Experian Employer Services (a Workday Software Partner since 2013) provides certified integrations that fill critical tax and compliance gaps for Workday HCM, Payroll, and Recruiting - from hiring to onboarding, and through ongoing employment. These solutions include a Workday-certified integration supporting complex tax withholding requirements for federal, state, and local, as well as Work Opportunity Tax Credits (WOTC) to accurately capture tax credits for eligible employees during the recruiting process.
If you found this blog helpful or if you found you need assistance with ACA, reach out to Stormloop Tech for Workday support and Experian Employer Services for ACA filing.
Contact us at info@stormlooptech.com to learn more.
Follow Stormloop here: https://www.linkedin.com/company/stormloop-technologies-llc
Experian Employer Services’ Workday Certified ACA State Filing & Print/Mail Integration: https://www.experian.com/employer-services/products/aca-reporting