With nearly 11,000 pages of rules and regulations — and 47 significant changes since its inception — the Affordable Care Act (ACA) is one of the most complex, compliance-related burdens businesses ever will face. Add the risk of millions of dollars in fines for noncompliance and it appears that this federal legislation has created more anxiety and confusion than someone trying to navigate through a large metropolitan city with an outdated paper map.
What Do I Need MY HR Technology To Do?
For those who lack directional abilities, GPS helps them make their way from point A to point B. Smart companies nationwide need similar assistance when trying to navigate one of the largest changes to health care in U.S. history. They, too, realize the right technology can keep them from getting lost — in this case, the ever-changing landscape of the ACA’s employer mandate.
To stay on-course, a growing number of companies are turning to specialized software created to address the following ACA compliance requirements:
- tracking employees’ hours worked to determine if they were measured as full-time during specific ACA time periods,
- ensuring that a certain percentage of full-time employees were offered insurance,
- determining if coverage is affordable and meets minimum essential requirements,
- notifying employees about health insurance exchanges and
- reporting the total cost of health care coverage.
Why Does a Single System of Record Matter?
Just as one requires a navigation system to maneuver through elaborate highway systems, the same is true with up-to-date ACA software. If you are using a human capital management (HCM) system with your time and attendance, benefits, document management and payroll data in a single application, your final destination is within reach! With the majority of compliance required information already existing within your HCM data, it is vital that organizations choose a provider that collects everything in a single system of record in order to ensure accuracy and consistency in reporting.
Do I Need a Plan for Filing and Furnishing Required IRS Forms?
The next step is confirming that your HCM software can handle the government-required forms easily and seamlessly. Employers with 50 or more full-time or full-time equivalent employees are obligated to file and furnish IRS Forms 1094/95-B and -C to the government and employees beginning this year. These forms verify full-time employees were offered insurance that meets the ACA’s standards. Most businesses simply are not prepared to handle the reporting responsibility or are uncertain their technology is equipped to handle this critical step in compliance.
In fact, over half of business prospects who attended ACA webinars hosted by Paycom in the first half of 2015 reported they were unprepared to comply with this requirement. Similarly, auditing firm PricewaterhouseCoopers reported that 46 percent of employers are unsure how they will deliver the required ACA forms.
Employers failing to comply stand a real chance of incurring substantial financial penalties. The recently enacted Trade Preferences Extension Act of 2015, more than doubled many fines for ACA reporting noncompliance.
However, those employers utilizing HCM software that includes ACA reporting and filing mitigate – if not eradicate – such compliance concerns.
The content of this blog is intended to keep interested parties informed of legal and industry developments for educational purposes only. It is not intended as legal opinion or tax advice and should not be regarded as a substitute for legal or tax advice.