ReadyPay ACA Guide
This guide explains how ReadyPay uses employee information to calculate Affordable Care Act (ACA) tax forms. Most data and settings are available in ReadyPay Online, while processing of the data takes place in ReadyPay.
| Audience | Employers producing ACA tax forms in ReadyPay |
| Purpose | Configure ACA service, enter coverage data, calculate forms, and file with the IRS |
| System | ReadyPay and ReadyPay Online |
Service Setup
The ACA Service must be set up on the Services page for any client looking for ReadyPay to produce ACA tax forms. When adding the service, several screens will be made visible within Company Setup for use in the process.
It is important to know the difference between Full and Mini Service Levels when adding the ACA Service, as each requires different inputs of data to calculate and produce the ACA tax forms. The descriptions below may not be enough to make a decision, so the rest of this document should be reviewed to understand each process for creating the forms.
Full Service
Clients that maintain Insurance plans within ReadyPay and wish to have the system calculate form data based on their employees' Insurance elections should use the Full ACA Service Level. The required information to be entered for this level is noted in the Option 1: Calculation from Insurance section later in this guide.
Mini Service
Clients may find it easier to enter the ACA tax form information directly into ReadyPay, either employee-by-employee or using a bulk editor (available in ReadyPay Online). This method ensures the forms are created as entered and does not depend on the setup of Insurance plans or Insurance elections being added to each employee. These clients should be set up with the Mini ACA Service Level. The process for entering the data is noted in the Option 2: Manual Coverage Entry section later in this guide.
Company Setup
ACA Setup
Several settings exist on the ACA Setup page, found in ReadyPay Online under Company > Benefits & Insurance, or in ReadyPay under Company Setup > ACA. Settings may either be used in calculating Offer and Safe Harbor codes (boxes 14 and 16 on the 1095-C) or are used for the employer transmittal forms (1094-C).
| Field Name | Information |
|---|---|
| Member of Aggregate ALE Group? | Mark if the company is part of an aggregate ALE group. The ALE Members tab cannot be edited without this box checked. |
| Authoritative Transmitter | Mark if the company is to be processed as an Authoritative Transmitter in forms filing. |
| Validation Setting | Currently not in use. |
| Forms Delivery Method | Choose how the company will receive forms. This setting can be overridden when actually running the forms. |
| Affordability Calc Method | Select the chosen affordability Safe Harbor method for ensuring affordability. This may be overridden on the Insurance Plan Setup. |
| Affordability Calc Frequency | The necessary ACAAffordability.Net job will run each month automatically — setting is no longer in use. |
| FTE Determination Method | Defaulted to Hours: FT status is determined by looking at hours worked in a month. Setting this to EmpType will review Emp Type and Emp Type History to determine FT status. May also be overridden on an employee-by-employee basis on the ACA Coverage page. |
| Qualifying Offer Method | Select the company default for reporting purposes. If the company uses multiple offer methods, the additional options may be set on the Insurance Plan Setup. |
Some of the settings also exist in the ACA Options sub-tab of the Plan Setup page in Company > Benefits & Insurance, so they may override company-wide settings for use with different employee groupings by benefits offered.
ALE Members
The ALE Members page (or sub-tab on ACA Setup in ReadyPay) will be made available in the same area of ReadyPay Online if the company is marked as a member of an aggregate group. Each additional group member should be entered for reporting. Company Code is required — only companies serviced by the service bureau can be added.
ACA Periods
When set up with the Full ACA Service, it is important to enter Initial and Standard Period settings. In ReadyPay, these are found in the pull-down menu on Company Setup > ACA, or in the kiosk on the Admin > Affordable Care Act > ACA Setup page. These settings aid in the calculation of Safe Harbor (box 16 on 1095-C) codes.
Only add one year for the Standard Period — the MM/DD will be used ongoing. Pay Frequency is required but does not affect the ACA Coverage calculation/process.
Data Entry Methods
The two distinct entry methods for entering required information to produce ACA tax forms are detailed in this section. Both methods require some data entry; however, only one (Option 1) uses calculation methods to complete ACA Coverage information automatically.
Option 1: Calculation from Insurance
The calculation of ACA Coverage information, specifically 1095-C Part II lines 14 through 16 codes, will be determined by reviewing Insurance elections on employees with their chosen coverage level (EE, Spouse, Child, Family, Waived) along with the coverage dates. Covered Dependents and their coverage dates are required for self-insured plans.
Company Insurance Plan Setup
Each Insurance plan offered to employees in the company should be added to the Company > Benefits & Insurance > Plan Setup page. If you are not using Insurance plans to deduct premiums from employees, only the minimum cost plan offered is required to be loaded. Each plan loaded should have at least the Employee-only premium set, as this is used on Form 1095-C in Box 15.
The ACA Service will turn on an additional sub-tab on the Insurance page, ACA Options. On this tab, you may set:
| Field Name | Information |
|---|---|
| Coverage Code Override | Optional. Select the Box 14 code to be used for all employees offered the plan. Not required, as the code can be calculated in the ACACoverage.Net job. |
| Meets Minimum Essential Coverage (ACA) | Mark for plans meeting minimum essential coverage for ACA reporting. |
| Meets Minimum Value (ACA) | Mark for plans meeting minimum value for ACA reporting. |
| Min Cost Plan | Select the Insurance Plan that represents the lowest cost plan that was offered along with the plan being set up. If the plan being set up is the lowest cost plan, select its own Plan Code. |
| Affordability Calc Method | Unless specified on the company's ACA Setup page for all employees, select the Affordability Calc Method used. This setting allows a company to have different groups of employees with different Calc Methods by tying them to the Insurance Plans. |
| Qualifying Offer Method (if any) | Unless specified on the company's ACA Setup page for all employees, select applicable Qualifying Offer Method(s). This setting allows a company to have different groups of employees with different Qualifying Offer Methods by tying them to the Insurance Plans. |
Employee Insurance Coverage
For each employee who has been offered coverage in an insurance plan, an insurance record will need to be added on the HR > Benefits > Insurance page. Add either the plan accepted by the employee or the lowest cost plan offered to them.
The Start and End Date of the insurance record should correspond to the coverage dates offered to the employee. If the employee took coverage in the plan, the appropriate Coverage type should be set up on the insurance record (options include Employee, Spouse, Child, or Family). For an employee that did not elect the coverage, the Coverage type should be set to Waived. If coverage changed at any point during the plan year, additional records with the applicable dates and types will need to be entered.
Adding Covered Dependents for Self-Insured Plans
Form 1095-C requirements may prompt the need to have Covered Dependents added to ReadyPay if the insurance plan(s) offered are self-insured by the employer. First, each covered dependent must be added to the HR > Benefits > Dependents screen with their Last Name, First, and Middle fields populated. All Covered Dependents must also have the Soc Sec # or Birth Date fields completed as part of the tax form requirements.
Once all dependents have been entered, proceed to the HR > Benefits > Insurance page and add each dependent on the Covered Dependents sub-tab. You must enter the Start and End Dates corresponding to the dates of coverage. When the ACA Coverage calculation occurs, the Covered Dependents sub-tab on the HR > Benefits > ACA Coverage page will display the applicable dependents from this area.
Accounting for Employee Changes
In order for the system to determine correct Safe Harbor Relief Code changes, it is necessary to track when employees are hired, terminated, and rehired, or even when they are switched from part-time to full-time. When the Employment Status of an employee changes, entries to the Termination Date and Rehire Date fields are required. If the number of status changes in the reporting year exceed the single-use fields on the Employee > Personal > Demographics page, you will need to review the calculated ACA Coverage information and make necessary updates.
When making manual updates, unmark the System Generated? check box to ensure your changes are not overridden by subsequent system calculations.
The information entered in the steps above will be used in ReadyPay's ACA calculation jobs to populate the HR > Benefits > ACA Coverage page.
Option 2: Manual Coverage Entry
ACA Coverage information, specifically 1095-C Part II lines 14 through 16 codes, will need to be entered manually on the ACA Coverage tab. Multiple wizards are available to make this process more efficient. The entered information will then be loaded directly onto the ACA tax forms with no calculation being performed. No employee insurance records are required or reviewed.
This option is not advisable for self-insured plans, as Insurance records are necessary to capture Covered Dependents.
Insurance Plan Setup
You must add a company-level Insurance Plan called ACAmini and set the proper plan year dates and ACA options for proper form completion. You do not need to add premiums, coverage levels, calculations, etc. because Coverage details are not calculated — they are being entered manually using this Option/Service Level. Some settings on the 1094/1095 forms are derived from plan setup.
ACA Coverage Data Entry
To begin the manual entry process, access the HR > Benefits > ACA Coverage page. If no entries exist on the page for the tax year being completed, one should be added.
The fields in the Coverage Information sub-tab will no longer be grayed out, and the Coverage information for the selected employee may be entered into the applicable fields. Most employees will have consistent coding for the entire year or for large portions of the year. A wizard is available by clicking the Coverage Wizard button to populate multiple months at a time.
In the wizard dialogue, enter the following:
| Field Name | Information |
|---|---|
| Year, From, To | Choose the year and months of the year the same Coverage information is to be loaded for. |
| The Offer Code for… | Select the 1095-C Line 14 Offer of Coverage code. |
| The employee cost… | Enter the employee contribution of the employee-only premium for the lowest cost plan offered — 1095-C Line 15 amount (if applicable based on the Offer Code). |
| The applicable Relief Code… | Select the 1095-C Line 16 Safe Harbor Relief Code. |
| Mark if coverage… | Mark if the Coverage entry being made is for an offer of coverage and the insurance plan is self-insured. |
The fields on the ACA Coverage page will reflect the entries made through the Coverage Wizard.
To manually add ACA Coverage information to multiple employees at once, a Coverage Bulk Editor can be found at Home > Dashboards > ACA Dashboard. The page contains both a Filter option and cost center selections to update the employee listing in the page grid. When making bulk entries, it is important to make sure the employees showing in the grid are those you intend to update ACA Coverage for. The wizard can be found by clicking the Coverage Bulk Editor button.
In the wizard dialogue, enter the following:
| Field Name | Information |
|---|---|
| Year, From, To | Choose the year and months of the year the same Coverage information is to be loaded for. |
| The Offer Code for… | Select the 1095-C Line 14 Offer of Coverage code. |
| The employee cost… | Enter the employee contribution of the employee-only premium for the lowest cost plan offered — 1095-C Line 15 amount (if applicable based on the Offer Code). |
| The applicable Relief Code… | Select the 1095-C Line 16 Safe Harbor Relief Code. |
| Mark if coverage… | Mark if the Coverage entry being made is for an offer of coverage and the insurance plan is self-insured. |
The fields on both the ACA Dashboard and the employees' ACA Coverage pages will reflect the entries made through the Coverage Bulk Editor.
ACA Data Calculation
All ACA data calculations are performed by either the ACAAffordability.Net or ACACoverage.Net jobs. The ACAAffordability.Net job calculates several things: FT Hours Worked (or FT based on Emp Type), Exclusions, Insurance Coverage Offered, Insurance Amount, and Covered Dependents. The ACACoverage.Net job takes the information calculated in the ACAAffordability.Net job to populate the employee ACA Coverage pages. It will not run a full calculation when using Option 2 (Mini ACA Service), as that option is 100% manual Coverage entry.
Job Processing
Both ACA jobs will run monthly — those choosing Option 1 will see ACA Coverage data as each month processes. In doing so, data can be reviewed periodically during the year so you may correct issues well in advance of forms creation.
Should all required company and employee information not be added until the end of the year, it will become necessary to run the jobs manually. This is done by clicking the Recalculate Affordability Data button on the Company Setup > ACA page in ReadyPay. The year and specific month(s) to be calculated should be marked. This same process can be followed after changes have been made to setup information that may result in calculation changes. Each month chosen will cause both ACAAffordability.Net and ACACoverage.Net jobs to be run (separate job per each month).
Full Time Determination
Determining whether an employee is full-time or part-time for purposes of form creation is calculated either by hours worked or by Employee Type. The FTE Determination Method setting is available on the ACA Setup page in Company > Benefits & Insurance. This company setting can be overridden on an employee-by-employee basis on the HR > Benefits > ACA Coverage page. An example of using the override is to look at Employee Type for employees who are not paid hours but are considered full-time.
Hours Worked
By default, the setting is set to Hours - Hours Worked. This option reviews all hours paid to employees that are paid using Earning codes that are marked as Worked and not marked to Exclude from ACA FTE Hours. These settings can be found on the Earnings page in Company > Earnings & Deductions. Employees working over 130 hours per month will be considered FT.
Employee Type
When choosing the EmpType - Employee Type FTE Determination Method, both the Demographics and EE Type History pages in Employee > Personal will be reviewed. Employee Types should be added in ReadyPay with applicable ACA statuses assigned to account for Full Time, Variable Hour, and Seasonal employment. The following situations should be reviewed:
- Employees were hired as full-time employees and were full-time for the entire tax year — no additional entries needed in the system.
- Employees hired as part-time employees and were part-time for the entire tax year — set the Employee Type on the Employee > Personal > Demographics page to a part-time code.
- Employees hired as part-time or full-time whose type changed during the year — first, set the current Employee Type on the Employee > Personal > Demographics page; then update the Employee > Personal > EE Type History page to reflect the prior Employee Types assigned to the employee.
New entries to the Employee > Personal > EE Type History page are made by entering:
| Field Name | Information |
|---|---|
| Employee Type | Select the applicable option for the period being entered. |
| Start Date | Enter the date the Type became effective. |
| End Date | Enter a date when the selected Type ended. |
Reviewing ACA Data
Once calculated information is produced, it can be reviewed by employee on the HR > Benefits > ACA Coverage page or by going to Home > Dashboards > ACA Dashboard. The data can be manipulated on the ACA Coverage page to override the system calculations due to special circumstances.
When changes are made, the System Generated? box should be unmarked to prevent overrides of your information in subsequent system ACA calculations.
Insurance plan setup will determine whether the Self Insured? check boxes are marked. The FT Status Hours will display the results from the Full Time Determination section in this guide. Hours below the full-time threshold will appear in red. Employees whose status is based on Emp Type will display asterisks. Overrides to the monthly full-time determinations can be made on the Employee > ACA page in ReadyPay only. Counts on Form 1094-C are based on this data.
Covered Dependents may also be reviewed on the separate sub-tab on the page. The information found here will populate Form 1095-B Part IV and Form 1095-C Part III.
Tax Form Production & Filing
ACA tax forms may be printed or published online and E-Files generated on the ACA Forms page in ReadyPay, located under System > Tax > Year End. The Year End Date should be updated to show the applicable year's ACA form history. Mark All and Unmark All buttons at the top of the screen may be used when creating forms.
The screen will display all clients with an active ACA service. The Form Code for each client will display based on a count of the FT employees. If the count is over 50, then 1094-C will be present.
For companies that may not have 50 FTEs but are considered ALE members, the Form may be changed by going to Company Setup > ACA and selecting the appropriate Form Code in the Year End Forms screen.
Filtering Options exist to change the view of clients on the screen for production of forms/E-file based on the selected filter values. Custom ACA Filters can be built under System > Setup > Misc > ACA Filters.
Producing Forms
To produce the tax forms, make sure any companies to have forms produced are highlighted, by using the Mark/Unmark All buttons or by toggling a client individually on the screen by clicking on them. Click Produce Forms to begin. Several options have been added to produce forms as expected:
- Form Delivery Options — Based on the elected setting of each client, forms can be printed or sent to the Documents Portal (2 options). The settings can be set on the company level under Company Setup > ACA by selecting the proper option in the Forms Delivery Method field. You may choose to Mask SSN, which displays in XXX-XX-#### format. You may also choose to run employee forms separate from employer transmittal forms.
- Transmitter Settings — Select the tax Preparer information to be used on the transmittal forms. Preparer Info can be found in the Tax > Filings area.
- Print Options — Select how the forms should be produced when not directly being sent to the Documents Portal. PDFs can be created and sent outside of the Documents Portal by entering a valid UNC path. Use Pressure Sealed Format produces 8.5 x 14 format for pressure seal stock. It is not necessary to select Print Options if specifically running the forms just to the Document Portal and Employee Self Service.
- Schedule Jobs — Start the forms processing later by entering the number of minutes to delay the job.
- Mark Forms as Published — When marked, employees can be given access to their Form once released by the client on the myReadyPay employee kiosk.
The number of jobs/companies that will be run using the ACA Form Production settings above will display in the upper right-hand corner of the box. Clicking the Continue button will kick off the ProduceACAForms.Net job.
Generating E-Files
Prior to creating files, you will need some new tax preparers in System > Tax > Filings > Preparer Info. Specifically, you will need one for each type of form you will be submitting: 1095B and/or 1095C. On the details tab you will have to enter the Software ID assigned by the IRS in the Reserved 1 field. If you are submitting Test files, you should enter the letter T in the Reserved 2 field, as this will flag the file as a test. On the Transmitter Information sub-tab, in the field labeled TCC, enter your assigned Transmitter TCC Code. Fill in the other fields as you would normally on a preparer.
Once the preparers are set up, files can be generated on the ACA Forms page in System > Tax > Year End. The IRS expects to receive 2 files containing X number of companies. The first file is a manifest detailing the submission and the other is the actual submission file. You can only submit one type at a time, 1094B/1095B or 1094C/1095C, so when you create a file you need to filter for either one of the above at a time.
You can individually select each company you want to include in the file or you can click the Mark All button.
Next, click on the Generate EFile button, which will open an options dialogue box. You will want to select the form you are creating, 1094B/1095B (the 1094B checkbox) or 1094C/1095C (the 1094C checkbox). Select a Preparer: this should correspond with the form type you are creating. When creating 1094B/1095B, for example, you would select the preparer that contains the Software ID for Forms 1094B/1095B.
You may choose to schedule the job to run in the future rather than immediately. By specifying the number of Minutes From Now or setting the Schedule Date and Time, you can ensure the job does not interrupt other processing.
When the job is complete, you will have 2 files that should be uploaded to the Internal Revenue Service (IRS). You can find them in the EFile directory as specified in System > Setup > Directories. There will be a subdirectory located there called ACA, and a subdirectory of that labeled for each filing year created. You should have 2 files in there resulting from the job. The first is called a Manifest and the second is called a Request. The file names are as labeled accordingly:
Manifest_1094B_YYYYMMDDHHMM.xml(a timestamped file)1094B_Request_TCC_YYYYMMDDTHHMMSSNNNZ(your TCC followed by a timestamp)
These 2 files get submitted at the same time. If you create all of your files and have numerous files you are sending, pay attention to the timestamps so you send the correct files.
The files can then be uploaded to the AIR System. For further information about the AIR system, refer to the IRS AIR documentation.
Questions?
For help with ACA service setup, form production, or e-filing, contact your Payroll Service Provider.