ACA Compliance – Are You Ready?
November 1, 2016
The Patient Protection and Affordable Care Act (ACA) runs 11,000 pages and is divided into 10 titles. Complying with this landmark law has been challenging for employers, as it contains many wide-ranging provisions that are being phased in through to 2020.
Most businesses don’t have the resources to employ a full time specialist to move the company through the ACA compliance maze. That leaves two choices: You can seek out a third party solution with the expertise to help you understand the impact, or take your chances on getting it right at the end of the year.
Do You Know How the ACA Affects Your Business?
The ACA is one of the most complicated pieces of legislation ever enacted in this country. With different provisions going into effect every few months, it takes enormous effort to manage compliance factors.
When making the calculations around which employees should be covered with health insurance, there are several factors that must be evaluated:
- Number of hours worked
- Employment type status—temporary, part time, hourly permanent, etc.
- Number of employees/size of company
There are different regulations associated with each of these factors.
There are many businesses that have existed for decades, perhaps, with legacy “home-grown” systems, or that operate in an industry that lags behind the technology growth curve. For these businesses, implementing change on a hard-and-fast schedule can be expensive and time-consuming.
For companies in manufacturing, ways of conducting business are often the product of service vendors, procurement needs (PO systems, etc.), as well as needs dictated by AR/AP systems built to conform to supply chain needs. HR and time/attendance systems are not always technology-based either. In these cases, the systems operate in “siloes” and don’t talk to each other well. For companies in this situation, ACA compliance is becoming the impetus for a major business shift.
Why is it so Hard to Get Answers to Questions?
A business owner can never totally offload the responsibility for compliance. It is critical to ask the right questions to become educated on the law, rather than simply asking a consultant or technology vendor “can you do this for me?”
The law is still relatively new, and even the most competent advisors have very limited real world experience with ACA compliance. Business owners need to be able to take ownership of compliance by understanding how the law applies their unique real-world business situation.
Making the Change: Understanding is Only the First Step
Once you understand what the law requires, and how it pertains to your business specifically, implementation is the next step. Because of the specific taxation requirements in the law, many HR and Benefits solution providers won’t be much help. There are particular tax forms that are critical to success here, and HR/Benefits companies are unwilling to enter those waters without a strong background in the area.
The other choice is consulting with a payroll solution provider. However, engageing another solution provider in your administration function adds another cost to the business.
One of the other hurdles that must be overcome is the system’s need for data. Data must be extracted from whatever systems are in place, gathered, normalised and interpreted—a time consuming proposition. As with any business shift operation, the potential for human error is very real.
One of the more publicised portions of the law pertains to the 4980H “Safe Harbor” part of the code. This is where employers evaluate whether they are going to offer coverage to their employees, or whether they’re going to pay the penalty for not doing so.
Regardless of the decision, specific tax forms must still be filed. In fact, there are penalties for not filing the right forms in this area, over and above those involved in the decision not to provide employee coverage. No matter the decision, action is required.
There’s Another Way
Here at Asure Software, we’ve taken a different approach to Human Capital Management that helps companies ensure compliance with the ACA. We have specialists on staff committed to educating business owners about how the healthcare law affects them, and we offer flexible, multi-faceted solutions to meet your individual business needs.
If you’re interested in leverageing our expertise in a low-immersion situation, we have an application called Healthcare Reform Manager that will help you manage every aspect of this difficult area. It’s more than just a tax return generator—it will give you the information you need to make wise business decisions.
The system tests for affordability and eligibility, based on the data you provide. In fact, you can generate sample returns at any point throughout the year to test both your decisions and your data. Waiting until your Q4 to make these decisions is an expensive mistake.
Beyond ACA compliance, if you’re feeling like a new approach to HCM is in order, well, we do too. Our comprehensive People Success Platform is meant to address every aspect of the employer/employee relationship. It engages and enables employees to make decisions on their own behalf, within the framework you set. Our platform allows you to recruit, engage, and retain the best talent possible, making your business run more efficiently in every way.