Company: Ernst & Young, New York, NY
Entry Submitted By: River Communications
Company Description: EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders.
Nomination Category: Company / Organization Categories
Nomination Sub Category: Technical Innovation of the Year - At Organizations With 1,000 or More Employees

Nomination Title: EY ACA COMPASS

Tell the story about this nominated innovation since January 1 2014 (up to 650 words). Describe how the innovation was discovered, developed, refined and/or deployed. Provide an assessment of how the innovation has impacted or will impact your organization, your industry, markets or society.

With the release of the Affordable Care Act’s (ACA) final guidance on Employer Shared Responsibility and information reporting requirements, employers must confirm their current systems are adequately prepared to comply with the law. EY has followed the ACA from the beginning and invested in developing the technology necessary to help evaluate a company’s options and implement the right choices within their organization. With this next phase of ACA compliance and reporting requirements, EY has responded by developing a breakthrough technology, ACA COMPASSsm. This ground-breaking technology addresses complex tax and health care benefit issues inherent in a company’s ACA compliance and reporting strategy. Its proprietary code, state-of-the-art design, and innovative application offer a unique ACA software that allows tax leaders to be more analytical and proactive, while protecting their bottom line by mitigating potential costs and excise taxes.

Because ACA is not a one-size-fits-all issue, EY developed ACA COMPASSsm to be comprehensive, customizable and built on a foundation of people, process and technology. Even with outside benefits providers supporting an organization, the ACA is too complex for traditional systems, creating significant exposure to penalties and risk without the necessary technology and infrastructure in place. The ACA COMPASSsm end-to-end solution assists companies by refining all aspects of ACA compliance process, including employee determinations, exchange management, IRS statutory reporting, and workforce analytics. A cutting-edge platform, it significantly mitigates exposure to four key employer risks:

-Misclassified workers expose employers to excise taxes that could equate to $2,000/full-time employee. For example, employers with 10,000 full-time employees that miscalculate by 3,000 employees in 2015 risk a $20M excise tax. The regulatory threshold drops to 5% (500 employees in this example) in 2016.

-ACA requires appropriate documentation and internal controls to support contingent liabilities, tax accruals and financial statement positions. Mistakes and weaknesses lead to significant financial risk. ACA COMPASSsm supports the appropriate controls by providing comprehensive, accurate reports based on the knowledge and insight of EY’s tax and ACA compliance professionals.

-Employers must provide a timely response or appeal to each Federal or State Exchange notification, potentially facing tax penalties (up to $3,000/employee). ACA COMPASSsm brings accurate information to the surface and provides proper data and documentation for effective appeals, a valuable tool for large organizations with multiple entities, locations and employees. Without an organized system and process to store detailed data, companies may be challenged to respond accurately based upon the information supplied on the notification (i.e., differentiating between employees with the same or similar name).

-Penalties also stem from lack of timeliness and accuracy when filing IRS statutory forms: $100 per late form and $100 per inaccurate return, up to $1,500,000 per entity. ACA COMPASSsm reporting capabilities bring together the data and analysis to mitigate these penalties.

With ACA COMPASSsm, organizations do not have to build the internal processes necessary to mitigate their potential tax risk. It provides internal teams with on-demand data to monitor their compliance and reporting needs, generating graphical reports and an interactive dashboard to proactively uncover trends and pinpointing potential issues.

Other technologies only offer cursory abilities to break down and analyze data, precluding organizations from leveraging and balancing the full scope of tax and workforce options. ACA COMPASSsm applies every nuance of the regulations and allows employers to use compliance as a strategic advantage, reduce costs, and mitigate tax liabilities.

Unlike other systems, ACA COMPASSsm‘s flexible design can provide a la carte services while remaining collaborative – supported by EY professionals for analysis and strategic recommendations. Its versatility and impact is far reaching, helping U.S. organizations of all industries, geographies and sizes remain ACA compliant.

In bullet-list form, briefly summarize up to ten (10) chief characteristics or benefits of the nominated innovation.
Total 147 words used.
1.Determine employment status, by entity, through initial and ongoing measurement/stability periods.

2.Determine 4980H(a) excise tax penalty risk, by entity, by identifying potential full-time employees not offered coverage.

3.Ability to determine employee eligibility for specific state health care programs.

4.Third-party agreement with the federal and state Marketplaces to receive notices in a central location as the addressee of record (if an attest client, the notices must go to the organization first).

5.Notice analysis and appeal determination –assistance providing evidentiary documentation to support the appeal.

6.Ability to capture the status of received notices/pending appeals to support a timely response.

7.Prepare and provide employer and employee reporting mandated by Internal Revenue Code 6055 and 6056.

8.Prepare and transmit form 1094C to the IRS.

9.Prepare electronic file for organizational approval of individual statements, coinciding with IRS reporting to employees (form 1095C).

10.Provide supporting analysis and documentation for defending against IRS assessments.