AI Compliance Monitoring Agent

How Cassidy automates this using AI

Step 1: Trigger on data sync or calendar milestone

The Workflow activates when HRIS, payroll, or benefits enrollment data syncs to the Knowledge Base—or on scheduled intervals tied to measurement period transitions, open enrollment, and year-end filing deadlines.

Step 2: Determine ALE status and controlled group structure

Cassidy pulls employee counts and ownership data from connected systems, calculates full-time and FTE totals using prior-year monthly averages, maps Aggregated ALE Groups, and identifies which entity files as the Authoritative Transmittal.

Step 3: Track full-time status and eligibility

The agent applies the client's configured measurement method—monthly or look-back—to each employee, tracking hours, employment breaks, rehire rules, and stability period obligations. Variable-hour and seasonal employees are flagged with their current measurement status.

Step 4: Analyze affordability by safe harbor

Cassidy compares each employee's required contribution for the lowest-cost self-only MV plan against the elected safe harbor (W-2, Rate of Pay, or FPL), surfaces pass/fail results by month, and recommends contribution adjustments when thresholds are at risk.

Step 5: Generate coded 1094-C/1095-C forms

The Workflow assigns Line 14 offer codes, Line 15 contribution amounts, and Line 16 safe harbor or relief codes for each employee-month—handling edge cases like COBRA, ICHRA ZIP codes, conditional spousal offers, and union coverage. Part III is populated for self-insured months.

Step 6: Validate and e-file through IRS AIR

Cassidy validates the complete filing package against Pub. 5165 schemas and business rules, flags TIN mismatches or coding errors for Human-in-the-Loop review, and submits electronically. Acceptance, errors, and rejections are tracked with automated correction workflows.

Step 7: Manage state filings and furnishing

For clients in CA, DC, MA, NJ, or RI, Cassidy routes 1095 data to the appropriate state portals by deadline. Employee copies are furnished per IRS rules, with consent tracking and alternative website notice documentation where permitted.

Step 8: Prepare 226J response kits

When IRS penalty notices arrive, Cassidy compiles employee-month reconciliations, safe harbor documentation, offer evidence, and reasonable cause narratives—giving brokers an audit-ready defense package without manual reconstruction.