The Probabilities of ACA Audits are Rising Quickly

The Probabilities of ACA Audits are Rising Quickly



The first set of audits in relation of health care reform compliance was completed in 2012. Three years down the line, there are other government entities that are bringing out new audit activities. They are really serious about getting businesses to comply under the new Affordable Care Act.

Auditing and Tips

Government entities are not only auditing, but they are also making sure that the findings in the audit are understood between government entities. In the case that an auditor finds a problem that he can’t enforce, tips will be passed on about organizations that are weak in compliance. There are about three reasons for the new surge of audits.

The Three Reasons for Increased Audits

The first reason for increased audits is the funding gap which causes the government to try to make up for the shortcoming. The complexity of the ACA is another factor in this. For one thing, the regulations total more than 25,000 pages. The complaints of the employee are another factor in the increase of audits.


Increased Efforts

The Need for Increased Efforts

Employees need to increase their efforts for compliance in order to avoid an audit. One good way to achieve that is to find the laws which threaten your business. In this case, what an employer does not know could hurt him.

Common Audit Trigers

To add to state exchanges, audit activities have been increased due to some of the following triggers. There must be a sample of a written notice for children up to age 26 who have used the plan ever since fall of 2010.Retroactive coverage takeaways are also a trigger for audits. Other triggers include grandfathered plans and waiting periods.

Grandfathered Plans

Employers with grandfather plans need to document the status. They also must provide an annual notice that is given to everyone participating in the grandfathered coverage. However, the agency is rather hostile to grandfather protection plans and may scrutinize the validity of these plans.


Waiting Periods

Waiting Periods

Plan sponsors cannot incorporate a waiting period beyond 90 days from when the person was hired. In the audit, this will be examined. If there was a complaint from the employee, then the issue will be looked into.

IRS Audits

There is a new requirement set forth by the ACA for the employer to self-report. This is to help the IRS in relation to the mandate of offering full time employees affordable health coverage of minimum value. Future failures of employer reporting may result in penalties of up to $1.5 million.

Penalty Triggers

Among the issues that the employer may face when it comes to penalties is any health coverage mandate violations. These are separately triggered penalties. However, the fines and penalties that could result from them are substantial.

Tracking Hours

The ACA has set the standard for eligibility at 130 hours monthly. Employers must be careful to provide predictable work hours in order to avoid close scrutiny when it comes to enforcement. Even the employers that are expected to work less than 130 hours are hit with this challenge.


More Effort

Put More Effort In Compliance

There can be significant penalties that result from audit failures. However, enforcement agencies receive many great benefits from it. They put the supplemental revenue that they get from this in effect to employ more auditors.

A Time for Understanding

There have been indications of a grace period by federal regulators. This was to allow for employers to understand the new law before they are hit with the penalties. However, it is still recommended that the employers figure out the compliance as soon as possible in order to avoid being audited and penalized.

Contacted by Enforcement

In the case that an employer is contacted for enforcement, an organized and comprehensive response can get the government to find a less difficult target. It is important to be prepared and organize a plan sponsor so that the compliance audit issue can be resolved. Audits are a scary thing for anyone to have to go through. The fees that result from the audit are great as well.


Article provided by NECHES FCU, with locations in Port Neches and Beaumont Texas.
Neches FCU is a Texas credit union with an attentive team of professionals ready to provide services to its 45,000+ members. “Ultimate Member Satisfaction” is the driving force for every employee on staff. They are well-known for a personal service experience, where all clients are known by their name.

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