The holiday season may bring twinkling lights, cookie swaps, and a calendar full of end-of-year deadlines — but for HR teams, December has a way of revealing the real source of stress: hidden compliance risks.

It’s not the fun kind of surprise, like an unexpected Secret Santa gift. It’s the kind that shows up in Q1 as a discrepancy report, an IRS penalty notice, or a frantic scramble to correct 1095-C forms before the filing deadline.

And while you may still be recovering from a mashed-potato-induced food coma, the time to catch these risks is right now — before January turns up the pressure.

If you haven’t yet reviewed your full compliance checklist, start here:

https://selerix.com/blog/year-end-compliance-wrapping-up-planning-ahead/

Below are the year-end compliance blind spots even seasoned HR pros overlook — and how to fix them while there’s still time.

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1. Outdated or Inconsistent Employee Data (The Silent Filing Killer)

Incorrect addresses. Old last names. Wrong birthdates. Duplicate records. Half-processed life events.
Nearly every ACA-related headache can be traced back to one issue: bad data.

When your benefits platform, payroll, and carrier files aren’t aligned, it creates a ripple effect that can derail your 1095-Cs — and in some cases, trigger IRS notices.

Watch for these common mismatches:

• Misspelled names or incorrect SSNs
• Eligibility not updated after transfers, promotions, or status changes
• Terminations missing from one system but active in another
• Enrollments showing on carrier reports that aren’t in HRIS

Why this matters:
These inaccuracies lead to coding errors, incorrect offers of coverage, and potential penalty exposure. If you need a refresher on what the IRS may send your way, this guide is worth your time:

How to fix it:

• Complete a cross-system data audit before year-end.
• Reconcile carrier files with your benefits platform.
• Validate demographic fields — especially SSNs and DOBs.
• Ensure all 2024 life events have been processed correctly.

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2. Eligibility Tracking Errors That Throw Off Your ACA Codes

If your measurement periods weren’t managed accurately throughout the year, your ACA coding strategy may crumble as filings begin.

Common issues include:

• Variable-hour employees incorrectly classified
• Rehires treated as new hires (or vice versa)
• Unpaid leaves not applied correctly
• Misalignment between measurement and stability periods
• Safe harbor methods applied inconsistently

Even one misclassified employee can create coding inconsistencies — or worse, show that no offer of coverage was made. Brush up on coding essentials here and keep penalties in perspective (they’ve increased):

How to fix it:

• Re-run your ACA summary reports ahead of the filing window.
• Double-check FT/PT statuses for accuracy.
• Confirm which safe harbor method your organization is using — and apply it consistently.

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3. TIN Validation Issues (A Top IRS Red Flag)

TIN mismatches don’t feel urgent — until they become a problem.
The IRS doesn’t accept incorrect SSNs or name mismatches, and repeated errors can lead to escalating compliance exposure.

What triggers TIN issues:

• Hyphenated or updated last names
• Missing dependent data
• Typographical errors (the most common culprit)

How to fix it:

• Run your TIN validation report early.
• Correct subscriber and dependent details before forms are generated.
• Work with your ACA vendor to validate and reprocess errors.

If you want to avoid the kind of letter no one wants in their mailbox, it’s easier to fix these now than in March.

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4. Multi-State Compliance Gaps (Remote Work’s Most Difficult Holiday Guest)

With distributed workforces now the norm, multi-state compliance has become a year-end minefield.

Key risks:

• Incorrect state-based 1095-C filing requirements
• Payroll deductions that don’t match local mandates
• Employees physically located in a different state than HRIS shows
• Missing state-mandated notices

How to fix it:

• Confirm employee work locations are accurate.
• Check whether you must file 1095-Cs at the state level (e.g., CA, NJ, DC, RI).
• Review state-paid leave and benefits regulations that may affect 2025.

Remote work makes compliance more complicated, but it also makes early auditing non-negotiable.

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5. Unreconciled Carrier Files — The Risk You’ll Regret in January

OE changes, dependent adds, waivers, and corrections make December’s carrier discrepancy reports especially important.

If you skip reconciliation now, you risk:

• Incorrect billing
• Coverage lapses
• Enrollments not loaded to carriers
• Employees showing the wrong plan on their 1095-C

These errors don’t disappear — they snowball.

How to fix it:

• Reconcile enrollment and carrier lists for all plans.
• Ensure January 2026 file feeds reflect the right deductions.
• Resolve outstanding or “stuck” life events before the year flips.

Don’t let carrier mismatches become a Q1 headache.

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6. Overlooking Entity Changes, M&A Activity, or ALE Group Realignment

If your organization added EINs, acquired entities, or changed ownership structures this year, it directly affects ACA reporting.

Risks include:

• Incorrect aggregated ALE group reporting
• Missing EIN-level submissions
• Misaligned offers of coverage
• Wrong coding on 1095-Cs

How to fix it:

• Review your ALE group structure with payroll + compliance vendors.
• Confirm EIN-specific reporting requirements.
• Validate hours and eligibility tracking across combined entities.

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How to Fix These Compliance Risks Before January — A Quick Playbook

✔ Start with a full benefits data audit

Align your benefits platform, payroll, and carriers.

✔ Re-run ACA summary & audit reports early

Spot coding errors, eligibility issues, and TIN mismatches now.

✔ Reconcile all carrier discrepancy reports

Ensure 2025 file feeds begin clean.

✔ Validate your safe harbor method + coding strategy

Avoid unnecessary penalty exposure.

✔ Document everything

You’ll thank yourself during any 2025 audits.

✔ Partner with your vendors

This is where strong partners make year-end smoother, not harder.

If you want deeper guidance, our on-demand webinar walks through critical 2025 deadlines:

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How Selerix Helps HR Teams Avoid Year-End Compliance Surprises

Year-end compliance doesn’t have to feel like a sleigh ride with missing reins.

Selerix provides:

• Automated eligibility + hours tracking
• Error-flagging dashboards for early correction
• TIN validation and data integrity checks
• ACA coding support and full-service reporting
• State-level filing assistance
• Dedicated expert guidance — year-round

When you have tools and support designed for compliance, January becomes far less stressful.

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Final Thoughts: Compliance Doesn’t Take a Holiday — But Fixing It Doesn’t Have to Be Hard

As the year winds down, catching these hidden risks now is the best gift you can give your future self (and your filing season). A clean, accurate, reconciled dataset in December means fewer surprises in February and fewer IRS letters in March.

Need help ensuring your compliance season goes smoothly?
Start with our full year-end checklist:

Or connect with our experts — we’re here to support you before, during, and after ACA season.