ACA compliance poses a formidable challenge for any organization whose core business is not healthcare or insurance. It requires a solid understanding of the law’s many provisions, including a set of complex requirements for reporting employee data to the IRS.
Part of this complexity stems from fact that no single system is designed to collect all the data the IRS requires, which includes EINs, employee data, unpaid leave information, and benefits details such as plan costs, offers, enrollment data and coverage status. That means employers have to tease this data from multiple sources – typically payroll, human resources information systems (HRIS), and benefits administration platforms. If an organization has recently gone through an acquisition or merger, there may be a number of these systems involved. What’s more, employee data such as name, date of birth, SSN and EIN may differ slightly between these applications and systems, creating a need to manually verify and reconcile entries.
Here are just a few of the data quality issues to consider:
- Most current systems don’t track unpaid leave – and if your organization doesn’t track the three types of federally protected unpaid leave of absence that are critical while performing a look back, your results can’t be certified as accurate.
- Manually extracting data from some payroll systems may require assistance from the vendor – who may charge a fee for the work.
- The ACA has different rules for different types of employees: full time, part time, variable hour, seasonal employees, seasonal workers, volunteers, adjunct professors, pilots, commissioned sales people, student workers, and more.
- Affordability rules for guaranteed benefit payments to unions are very complicated and require a level of analysis that wasn’t previously required and simply isn’t tracked.
The bottom line is that it’s very difficult to know what data to track and how to find it – and perhaps more crucially, what data may be missing. If you’re creating an in-house team to handle ACA compliance, they’ll be headed into uncharted waters, and they’re going to need a lot of time and resources to get it done.
A benefits specialist like Tango can help – either by providing a single source for the technology, education, and expertise you’ll need to develop your in-house ACA reporting procedures, or by offering a turnkey service that can handle data collection, tracking and reporting for you.