Choosing the Right ACA Solution
By Allison Manno, Vice President of Compliance and Client Services, Health e(fx)
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Employers recognize how an automated Affordable Care Act solution can streamline compliance and reporting. But how do you know you're implementing a solution that works? Like many employers, your 2015 ACA reporting may have been stressful, especially if the vendor or technology you chose did not deliver.
This year, be sure you know what you're buying. You need a solution that can not only handle reporting, but also aggregate, consolidate, manage and audit population data to ensure ongoing compliance with continuous ACA changes.
When choosing a solution for your organization, here are some guidelines to help you evaluate partners and technologies to make sure you get it right.
How well does the vendor understand ACA law? There have been numerous changes to the ACA since its 2010 enactment. Failing to understand the consequences of the law as it impacts your organization can be costly, but keeping up takes time, energy and expertise that you may not have. The technology you choose is important, but you also need an expert partner that you trust, a provider that fully knows the requirements of the law and how they apply to your organization.
ACA compliance depends on accurate and timely workforce data. Most employers house employee data in multiple and often non-compatible systems. Can the technology accept data from your HRIS, payroll, benefits administration and leave/disability systems? Or will you have to do significant up-front work to process it into a format the ACA solution can use? Was the solution built for ACA compliance, or is it an add-on to another system?
Monthly Eligibility and Affordability Management
Determining eligibility is challenging. Does the ACA system track eligibility monthly, so you can identify people as they become eligible? If not, and you don't realize you've missed an offer of coverage until late in the year, you could miss your window of opportunity to correct the error, and risk falling short of the 95-percent offer of coverage requirement. Monthly data is also needed to populate lines 14 to 16 of Form 1095-C -- to prove that affordable coverage was offered and either accepted or declined.
Monthly Data Auditing and Alerts
The ACA has forced employers to manage data not just for employees, but also for non-employee participants such as spouses, dependents and retirees. Does the ACA solution audit your data each month to identify errors that could put compliance or reporting at risk? Many employers were surprised last year to realize how many dependent Social Security numbers were missing or inaccurate. In fact, it was one of the most common data errors employers encountered when filing Form 1094-B/C. Monthly audits can alert you to issues before reporting season, so you can correct them early and avoid filing delays.
Electronic Filing and Ongoing Reporting
Is the software IRS-certified for electronic filing? The IRS requires large employers filing more than 250 forms to submit them electronically -- through an approved software solution. Verify whether your provider will file tax forms on your behalf. Ask if you can see how IRS forms will look before they are generated. How will you verify that code determinations are correct for each month? Can you see individual employee compliance data? Or will you be at the mercy of year-end outputs, and forced to make corrections after errors occur?
Analytics and Forecasting
What analytics and forecasting capabilities does the solution offer? With the right analytics, you can mine population data to see how factors such as age, geography, pay scale and retention will impact benefits enrollment and costs. Robust analytics can arm you with valuable, data-driven information to help you make strategic benefits decisions within the context of the ACA, forecast how many employees will be eligible for coverage or compare plan options. It can help you answer questions such as: Which benefits plans should you offer? What affordability safe harbor is most advantageous? How will upcoming ACA changes impact your bottom line? Should you pay or play?
As 2016 marches on, time is critical. The sooner you select and implement an ACA solution, the sooner you can take control over your ACA strategy. Don't wait until year-end, and risk facing another long and arduous reporting season.