Affordable Care Act (ACA) 1095 Calendar Year End Process
The Calendar Year End process is a critical year-end procedure in the Human Resources module that resets all calendar-year-to-date (YTD) payroll accumulators, prepares the system for the new calendar year, and purges historical data.
This checklist is a guide to use alongside the ACA Processing manual, which provides detailed information.
Any questions regarding these procedures or the processes involved with ACA should be directed to the Support Helpdesk.
PowerSchool Community Website Link: PowerSchool Community Welcome Guide
The 2025 Software Year-End Release is scheduled for mid-December and will include ACA changes for bug fixes, electronic file updates, and form and instruction updates.
Wait to print forms until after these updates.
1095 ACA processing is independent of W2 processing.
Terminating employees is very important. ACA Processing uses the termination date for the months the employee was not working.
Please read the entire document before performing the steps for actual processing.
Perform the following procedures in sequence to complete the ACA 1095 Calendar Year End process.
1. Set Security Access
Menu path
From the System Administration menu, select Administration. From the Security menu, select Roles or User Access.
The required access privileges are granted by assigning the appropriate security resource to roles or users.
Refer to Roles or User Access and assign the following security resources:
Package = HRM
Subpackage = ACA
Package = SSN
Subpackage = ACA
2. Update Benefit Status Table
Use the Benefit Status Table page to define which payroll deduction codes represent different types of health insurance coverage for ACA reporting. It maps deduction codes to ACA status codes that indicate whether employees have qualified health coverage.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select ACA Hours Tracking. On the ACA Hours Tracking page, select Benefit Status Table.
On the Benefit Status Table page, refer to ACA Hours Tracking - Setup - Benefit Status Table and do the following:
Update records with a Plan Status of D - Declined Qualified Plan by selecting the appropriate Offer Code.
Add new Health Insurance deduction codes.
Do not include HSA/HRA deduction codes.
3. ACA Hours Tracking - Load Check History
Use the Load (Check History) page to specify the criteria for loading the report data.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select ACA Hours Tracking. On the ACA Hours Tracking page, select Load (Check History).
On the Load (Check History) page, refer to ACA Hours Tracking - Load Data - Check History, and update and maintain the ACA Hours for all employees.
The best practice is to load the ACA Hours Tracking Check History after each pay run.
4. Set Up Employer
Use the ACA 1095 Maintenance - Setup Employer page to configure employer-level data needed to produce ACA forms that report health insurance coverage information to employees and the IRS.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Maintenance. On the 1095 Maintenance page, select Setup Employer.
On the ACA 1095 Maintenance - Setup Employer page, refer to ACA Employer Maintenance (Setup Employer Option) and set up a new employer record for the new Tax Year. If prior years' records exist, the following field values are copied to the new record:
Calculation Method
Employer Name
Street Address
Street Address 2
City
Country
Federal ID Number
State
Zip Code
Ensure that the appropriate Calculation Method is selected:
Use Check History: This option is recommended for districts on PowerSchool ERP for a full year. Dependents can still be tracked in the Benefits module or imported via a spreadsheet.
Use Deduction Benefits Date: If you use this calculation method, you must create 1095 records before maintaining deduction record start and stop dates for the new calendar year.
Use Benefits Module: This option is recommended for new districts. Dependents can still be tracked in the Benefits module or imported via a spreadsheet.
Select Authoritative Transmittal.
Select Self Insured if applicable.
Optionally, select 1095-B if you need to create 1095-B forms now. The Issuer or Other Coverage Provider(1095-B) tab is displayed. Enter or select valid information in these fields.
Enter the Transmitter Control Code provided by the IRS.
Select the Pay Information tab and update the fields in the Pay Runs For Total Employee Count Calculation section with the pay run number(s) for each month of the year to calculate full-time employee counts. The pay run entered needs to include the 12th of the month. Separate multiple pay runs by using the pipe (|) symbol.
5. ACA Benefit Group Maintenance
Use the ACA Benefit Group Maintenance page to define benefit groups that control how employee health coverage information is automatically populated on 1095-C forms. The benefit groups link employees (based on job class) to specific health coverage offerings and define coverage timing rules.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select ACA Benefit Group Maintenance.
On the ACA Benefit Group Maintenance page, refer to ACA Benefit Group Maintenance and do the following:
Create Benefit Group records or copy existing Benefit Groups with the new coverage dates. These groups are based on calendar-year dates, so if premiums change mid-year, two records are needed for each group. For example: 01/01/2025 to 06/30/2025 and 01/01/2025 to 12/31/2025.
Ensure that the Employee Share Amount is correct.
On the ACA Benefit Group Maintenance page, select Job Classes and review/update the job classes for each Benefit Group. A job class can only be included in one group.
On the ACA Benefit Group Maintenance page, select Deduction Codes and review/update the deduction codes for each Benefit Group.
Do not add waived deduction codes to the Benefit Groups. Add any not eligible deduction codes to the Benefit Groups.
6. Benefits Module
Use the Employee/Benefit Information page to view and maintain all benefit-related information for employees, including their enrolled benefits, covered dependents, and designated beneficiaries.
Menu path
From the Benefits menu, select Entry & Processing. From the Benefits menu, select Employee/Benefit Information.
On the Employee/Benefit Information page, refer to Employee Benefit Records and do the following:
If using the Benefits module for ACA employee data, verify that employees who are waiving coverage have a Waived Deduction Code record.
Select Dependents and then Dependent Benefits. On the Benefits for Dependent Information page, ensure that:
The correct health insurance deduction is selected in the Benefit field.
The Start Date and Stop Date are entered correctly.
7. Employee Deductions
Use the Employee Deductions page to search for employees, view their current deductions, and add, update, or manage deduction records, including employer contributions, direct deposit banking information, and accrual totals.
Menu path
From the Human Resources menu, select Entry & Processing. From the Employee menu, select Employee Deductions.
On the Employee Deductions page, refer to the Employee Deductions Page and update the employee health insurance deduction records if the Use Deduction Benefits Date option is selected in the Calculation Method field on the ACA 1095 Maintenance - Setup Employer page:
Update the Stop Date in the Employee Deduction Information section.
On the Employer tab, update the Benefit Effective Date.
8. Create Employee 1095s
Use the ACA 1095 Maintenance - Create Employee 1095s page to automatically generate employee 1095-C/1095-B records by extracting data from payroll and benefits systems.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Maintenance. On the 1095 Maintenance page, select Create Employee 1095s.
Customers using the Employee Access Center should verify that the Hide 1095 Year field is set to 2025 before executing this procedure. Refer to the Verify and update the Hide 1095 Year value section on the Employee Access Center Year End Process page for more information.
On the ACA 1095 Maintenance - Create Employee 1095s page, refer to Create Employee 1095s and create 1095-C records for the desired tax year and employer control number.
Ensure that Exclude Employee Flagged as Dependent is selected.
If you are not using the Benefits module, the Load Dependents from Benefits Module option is not displayed.
Select Create Covered Individuals if required. This option will list the employee only at this point unless dependents are loaded from benefits at the same time. You cannot select this option if the Load Dependents from Benefits Module option is selected.
Select Generate Safe Harbor Codes to populate these codes where appropriate.
Download or save the Employee Load and Unprocessed Employees reports and inspect the files.
Once 1095 records have been created for a tax year and employer control number, you may rerun the Create option periodically to update them. When recreating records, if dependent information exists, the system will prompt whether dependents should be deleted. If importing dependents via a spreadsheet, import those after the employee records are complete to avoid extra work.
Review IRS guidelines for including employees on COBRA.
9. Load Other Employee Records
Use the 1095 Maintenance – Upload File page to upload employee healthcare coverage information required for IRS Form 1095-C reporting under the Affordable Care Act. Instead of entering data manually for each employee, administrators can prepare data in a file format and upload it in bulk.
A layout template for this import file is available on the Calendar Year End Seminar Smartsheet.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Maintenance. On the 1095 Maintenance page, select Upload File.
On the 1095 Maintenance – Upload File page, refer to Upload File and upload the Employee File, which contains records for individuals who need to be reported for ACA but are not set up as employees in PowerSchool ERP.
10. Load Dependent Records (not using the Benefits module)
Use the 1095 Maintenance – Upload File page to upload employee healthcare coverage information required for IRS Form 1095-C reporting under the Affordable Care Act. Instead of entering data manually for each employee, administrators can prepare data in a file format and upload it in bulk.
A layout template for this import file is available on the Calendar Year End Seminar Smartsheet.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Maintenance. On the 1095 Maintenance page, select Upload File.
On the 1095 Maintenance – Upload File page, refer to Upload File and upload the Covered Individual File, which contains records for dependents covered by insurance plans but not tracked in PowerSchool ERP.
11. Review 1095 Reports
Use the ACA 1095 Reports page to produce detailed reports of 1095-B and 1095-C data that has been entered or generated in the system. It helps organizations review, verify, and audit their ACA compliance data before filing with the IRS.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Reports.
On the ACA 1095 Reports page, refer to 1095 Reports and generate the reports. The 1095 report shows the name, address, and month-by-month (or all 12 months) information for employees and covered individuals. A separate report for covered individuals age 26+ can be generated.
Download or save the reports and inspect the files.
Based on this review, some employee records may need to be modified manually and locked to prevent further system updates. For example:
The employee has a challenging coverage situation.
The employee has special exceptions for other reasons.
All employee information, employee coverage, and dependent coverage fields can be manually modified on the 1095 Maintenance page if needed.
12. ACA Safe Harbor Validation
This step is optional.
Use the ACA 1095-C Reports – ACA Safe Harbor Validation page to generate a report to help your organization determine if it is at risk of ACA penalties by comparing employee 1095-C data against W-2 wage data to validate affordability safe harbors. It identifies employees whose healthcare coverage may not meet the IRS affordability thresholds.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Reports. Select ACA Safe Harbor Validation.
On the ACA 1095-C Reports – ACA Safe Harbor Validation page, generate the report.
This report can be run after W2 records have been finalized. It validates an employee’s 1095 record for a specified tax year with a corresponding W2 record for the same tax year. It compares the employee share of the lowest-cost premium with W2 income and the poverty level to determine whether affordability safe harbors apply.
13. ACA Hours Validation
This step is optional.
Use the ACA 1095 Reports – ACA Hours Validation page to generate a report to help your organization ensure ACA compliance by cross-referencing employee work hours (from the hrm_aca_hours table) against 1095 form records. It identifies two key issues:
Full-time employees without a 1095 – Employees who worked enough hours to qualify as full-time but don't have a 1095 form on file.
Part-time employees with a 1095 – Employees who have a 1095 form but worked less than the full-time hours threshold.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Reports. Select ACA Hours Validation.
On the ACA 1095-C Reports – ACA Hours Validation page, generate the report.
This report validates that employees with average full-time monthly hours have a 1095 record. Employees who are less than full-time and have no 1095 will not be printed.
14. Calculate Total Employee Count
Use the Calculate Total Employee Count option on the ACA 1095 Maintenance - Setup Employer page to populate the Total Employee Count fields on the Monthly Information tab (which corresponds to Column (c) on IRS Form 1094-C Part III). Instead of manually counting and entering these values, the system calculates them from your payroll data.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Maintenance. On the 1095 Maintenance page, select Setup Employer. Search for records, select a record, and select Accept. Select Calculate Total Employee Count.
On the ACA 1095 Maintenance - Setup Employer page, refer to Calculate Total Employee Count and generate the report.
Download or save the report and inspect the file.
Select the Monthly Information tab, review the calculated values, and manually adjust those that are incorrect.
Select Accept.
15. Printer Setup
Use the 1095-C Filing - Printer Setup page to establish the technical configuration needed to print ACA forms using the Optio print server system. The settings defined here are used on the 1095-C Filing (ACAPrintForms) page when generating employee 1095 forms.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Printing. Select Printer Setup.
On the 1095-C Filing - Printer Setup page, refer to Prerequisite: Set Up Printer, and verify the ACA Print Forms Setup configuration:
Form Type: 5 – Laser Forms
Media Type: D – Disk/Electronic File
Optio Server
Print Type: V – Windows to Windows
Printer Name: Enter the name of the printer used to print forms.
Print Server: Enter the IP address of the server on which the printer is configured.
16. Year End Validations
Use the Run Validations option on the 1095 Electronic Filing page to generate a data validation report and sample XML file to identify errors before actual filing.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Printing. Select Year End Validations.
On the 1095 Electronic Filing page, refer to Run Validations and generate a data validation report and a sample 1094 XML file.
Download the report and make corrections to the data as required.
PowerSchool recommends running this report before generating the XML files for submission.
17. Print 1095 Forms
Use the 1095 Printing page to produce the official ACA tax forms that must be:
Mailed to employees – Each employee receives a copy of their 1095-C or 1095-B.
Submitted to the IRS – The 1094-C/1094-B transmittal form and copies of 1095 forms.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Printing.
On the 1095 Printing page, enter or select the criteria to print the 1095 forms for employees. Forms can be printed for select employees or by check location.
The system prompts you to select if this is the official 1095 form that will be sent to the employee. If it is a test run, select No. If it is the official run, select Yes. The system checks Human Resources for the most current address information and updates the 1095 records. If it is the official run, it also date-stamps the records. If you try to print again, you will be prompted to make sure you aren't reprinting a form that has already been distributed.
18. Electronic File Creation
Use the 1095 Electronic Filing page to create the actual IRS-compliant XML transmission files for upload to the AIR system.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Electronic Filing.
On the 1095 Electronic Filing page, refer to Create XML File, and create the electronic files. Two files are created:
The Request file, which contains the 1094 and 1095 records.
The Manifest file with basic submitter information.
Review the confirmation message before proceeding. A log report is generated showing the file names.
Download the files from the View Files page.
19. IRS File Receipt
Use the Create Electronic XML File - XML File Transmission Tracking page to track all electronic 1094/1095 XML files generated through the 1095 Electronic Filing process. It allows users to:
View a history of all XML transmissions created.
Record IRS response information after uploading files to the AIR system.
Track the acceptance or rejection status of each transmission.
Manage multiple submissions, including originals, corrections, and replacements.
Menu path
From the Human Resources menu, select Periodic Routines. From the Affordable Care Act menu, select 1095 Electronic Filing. Select XML File Transmission Tracking.
On the Create Electronic XML File - XML File Transmission Tracking page, refer to Transmit the XML Files, and do the following:
Once the IRS receives the file and a receipt number is generated, select Search to find the tracking record for the electronic file.
Edit the appropriate record and enter the IRS number in the Receipt ID field.
Update the Date Transmitted, IRS Status, and Date of IRS Status fields as progress is reported.
If the file must be resubmitted, the information on this record can facilitate that.