The first year of ACA compliance reporting was all about survival but 2016 promises to be full of more complex challenges and with stiffer penalties. The Affordable Care Act puts additional compliance pressures on organizations and many are still trying to figure out the best way to track and manage employee data to understand who qualifies for benefits, and to enable accurate reporting. While the government spells out the legal requirements for employers, how organizations choose to respond to these requirements is solely a strategic choice.
Maintaining compliance is only one piece of the puzzle. Having a strong workforce management strategy that ensures plan compliance through continual monitoring of the ongoing changes to ACA is critical.
No one would argue the complexity of maintaining ACA compliance so understanding some of the most common challenges is vital. When challenges do arise they often prevent employers from meeting reporting deadlines.
UST’s claims administrator, Equifax Workforce Solutions, helps hundreds of clients manage eligibility, affordability, and IRS reporting for over 18 million employees and is the industry leader in Affordable Care Act compliance. Throughout the process of onboarding hundreds of clients since the ACA Compliance regulations launched, Equifax has found the below challenges as the most repetitive.
1. Insufficient Resources
ACA regulations are complex and with increased penalties. Managing ACA compliance is vital and can easily be a full-time job that would likely include representatives from your IT, compliance, tax, benefits, legal, and HR teams.
2. Data Collection
Incomplete data, inconsistent data or accessing third party data can cause significant delays. Employers either are not tracking the data needed or running into quality issues with the data they are collecting. In addition, having to rely and wait on third party vendors to send the data necessary to complete required forms related to benefits, COBRA, and retiree data has turned out to be a major set-back.
3. Lack of a Workplace Management Strategy
It’s important to align business decisions you make around employee designations, measurement methods used to determine full-time status, and simplified reporting methods to name a few.
4. Form 1095 Confusion
Complex indicator codes for 1095s which can change month to month depending on an employee’s status, hours worked, wages and enrollment in benefits among many other factors is an extremely complex process. There is also a lack of employee training surrounding the new requirements and need for collection of additional information pertinent to accurate reporting.
5. Risk Exposure
Employers typically don’t find out whether or not they were compliant until the end of the year when it’s time to report and then hit with a fine. Being educated in on-going ACA compliance regulations ahead of time allows for adjustments along the way which ultimately can save you money and reduce exposure.
Organizations should be thoughtful in considering their strategy on how to respond to the ACA, taking a strategic approach to their decisions around workforce management.
This article was adapted from Equifax, the Claims Administrator provided to UST members at no additional cost. Check out how UST’s claims management support helped participating nonprofits win 7 out of 10 hearings here: http://www.chooseust.org/claims-administration/.