Wrestling with the ACA's Reporting Requirements

A new survey finds many organizations are struggling with the reporting requirements under the Affordable Care Act. Experts discuss ways HR leaders can get their organizations ahead of the compliance curve.

Wednesday, January 28, 2015
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How well is your organization managing the new reporting requirements under the Affordable Care Act?

If you feel unprepared, you're not alone.

According to a survey of 806 organizations conducted last fall by ADP, a human capital solutions provider based in Roseland, N.J., more than half of the large employers that responded-those with more than 1,000 workers-say they are unprepared to fully comply with the Affordable Care Act's regulatory requirements.

These results, however, aren't exactly surprising. Experts say they're simply another clear sign of the complexities and ongoing confusion surrounding the healthcare law.

The most pressing concerns of the survey's 806 responding organizations centered on exchange notices (62 percent), ACA penalties (60 percent) and annual healthcare reporting, specifically IRS forms 1094/1095-C (49 percent).

"These [reporting requirements] are far more complicated than they appear," says David Marini, vice president and managing director of strategic advisory services at ADP in Boston.

In order to achieve full compliance, experts say, employers must now prove to the federal government that their coverage meets the ACA's comprehensiveness and affordability requirements.

Consider, for example, the annual reporting responsibilities for employers with 50 or more full-time staff.

One such report mandates that these employers must divulge whether health insurance was offered to full-time workers and, if so, what type of insurance was offered. Some employers will also be required to report the value of the health insurance they offer on employee W-2 forms, while others may be required to provide annual employee statements that report everything from dates of coverage and covered dependents to the amount of premiums paid. (Last year, the ACA's individual mandate kicked in, which requires most individuals to prove they had health insurance coverage or else pay a penalty.) says that, in order for HR to pull all of this information together, they will need to gather data from various locations, including payroll, time and attendance, benefits and absence-management systems. And HR data is now being held to a higher standard, he adds, partly because the finance and tax departments of organizations must verify the accuracy of data being sent to the IRS.

"This is why a lot of organizations aren't feeling completely comfortable yet," he says. "This is all new... . [T]here's a lot of data elements that have to be tracked at every employee level, every month, to see whether or not they qualify for benefits."

Despite the availability of software programs or tools that could help tackle this massive effort, he says, they don't exist within most organizations. But even if they did, Marini says that software alone could never address this massive challenge.

One way companies can better manage the ACA's reporting requirements, says Marini, is to form a committee composed of C-suite leaders-including the CHRO-that can identify the types of data that must be collected and then develop realistic procedures for gathering it.

"We're recommending that they really get together in a collaborative group," he says. "That's the biggest issue HR has: being able to track and pull all of this information together from different systems."

Some employers, meanwhile, are relying on third parties to help them with reporting and staying in compliance, says Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington.

Whether this task is outsourced or not, he says, HR still needs to share best practices with their peers at other organizations and keep pace with new requirements or modifications, such as auto enrollment.

Initially, he says, the ACA required employers that offer health insurance and support more than 200 full-time employees to automatically enroll new full-time employees in a coverage option.

"It was supposed to be implemented in 2014, but the government suspended it until further notice," he says. "This is all new for the government, too, so there will be [other] modifications down the road."

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Despite the ACA's complex reporting requirements, however, they haven't triggered an avalanche of changes in plan options being offered by employers, according to a new Transamerica Center for Health Studies survey.

More than half (51 percent) of the 1,200 employees surveyed by the Los Angeles-based organization stated their employer does not plan on making any changes to their health insurance options this year. Meanwhile, only 26 percent of workers employed at companies with more than 500 employees say they expect option changes, while another 18 percent anticipate a reduction or elimination of employer contributions this year.

"Our survey data shows that [employers] have pretty much been doing what they've been doing all along," says Hector De La Torre, executive director at Transamerica. "They're not planning a lot of changes."

Regulatory requirements are nothing new, De La Torre says, and these latest ones don't seem to be impacting the decision making of employers regarding healthcare insurance.

While he readily understands the concerns expressed by large employers that support complex benefit structures, he does not envision major changes.

"Bureaucracy and regulatory requirements will always happen," De La Torre says, adding that HR leaders need to "look ahead, but to the extent you can stick to what you already have, do that."

"Trying to maintain continuity is very important at this point," he says.

The ADP survey did offer one surprise, however, according to Marini. Sixty-one percent of the large employers surveyed reported they offer health coverage to employees who aren't eligible for it under the ACA: those working less than 30 hours per week.

"For organizations with heavy full-time populations and very few part-time people, many of them found it easier to offer benefits to everyone rather than set up all these systems and processes," he says. "And 75 percent of the companies surveyed cited the importance of talent and how benefits play into their acquisition and retention [strategies]."

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