Employee Benefits Administration Flashcards

Under the ACA employer mandate, what does ADP's ACA module track to determine if an applicable large employer (ALE) owes a shared responsibility payment?

Answer: Full-time equivalent employee counts and whether minimum essential coverage was offered

ADP's ACA module tracks full-time equivalent headcounts monthly and documents whether minimum essential, minimum value coverage was offered to avoid ACA employer penalties.

What ADP functionality generates the Form 1094-C and 1095-C required for ACA employer reporting?

Answer: ADP SmartCompliance Health & Welfare module

ADP SmartCompliance Health & Welfare automates the production, distribution, and IRS filing of ACA Forms 1094-C and 1095-C.

What is the look-back measurement method used to determine ACA full-time employee status in ADP?

Answer: A defined stability period based on hours worked during a prior measurement period

The look-back measurement method averages an employee's hours over a defined measurement period to determine full-time status for ACA coverage requirements during a subsequent stability period.

If a new hire declines benefits during open enrollment in ADP, what action should the payroll specialist take?

Answer: Document the waiver and ensure no benefit deductions are set up for the employee

Documenting the employee's benefit waiver is critical for ACA compliance and ensures no erroneous deductions are processed.

Which IRS form reports the cost of employer-sponsored health coverage for W-2 reporting purposes, and where is it listed?

Answer: The cost is reported in Box 12 of Form W-2 using code DD

The aggregate cost of employer-sponsored health coverage is reported in W-2 Box 12 with Code DD, as required by the ACA, though this amount is informational only.

In ADP, what is a 'benefit plan year' and why is it important for payroll deduction scheduling?

Answer: The 12-month period during which elected benefits and corresponding payroll deductions are active

The benefit plan year defines the active period for benefit elections, and ADP uses it to schedule deductions correctly across the appropriate pay periods.