1 min read

Reporting Automation is Key to ACA Compliance for Large Employers

By Prime Care Tech Marketing on Mon, Jul 14, 2014 @ 10:00 AM

istock_000034567894smallMost large employers are aware of the potential “Pay or Play”1 penalties of the Affordable Care Act (ACA) that they will be facing starting January 1, 2015, assuming no postponement in the current timetable.  However, are these employers also aware of the many other pitfalls and penalties that they will face if they fail to be completely ACA compliant?  Chances are that whatever methods, systems, or software an employer is using, it won’t be able to easily attain all of the data necessary for ACA compliance requirements. To avoid penalties, large employers will need systems that are capable of tracking employee hours, benefit eligibility, dependents, waiting periods, health care coverage offerings, and enrollment by lines of coverage.  Even employers electing NOT to offer medical coverage will be required to send notices and reports to employees and the IRS. For employers with fluctuating work schedules, such as restaurants and health care providers, gathering this information can be difficult, time consuming, and expensive. 

To successfully comply, information gathering and accurate reporting automation will be critical to assimilating all such vital information and to dispensing it to employees and required reporting agencies. The challenge facing employers is that they may not have immediate access to the data required to be compliant. Further, the data may be unavailable, unusable, or of questionable accuracy. Even with the right data, employers’ data gathering and compilation systems face new challenges to conduct proper analyses and to satisfy stringent ACA reporting requirements. The new systems will need to have the capacity to deliver actionable information, track, forecast, and manage costs and trends, and still meet reporting requirements. For public firms auditability is also important under Sarbanes-Oxley requirements. An automated system that accurately provides all of the required information is essential to ACA compliance. Non-compliance, even unintentional, can be expensive, trigger audits, and disrupt business operations. A system that provides centralized data and communicates changes instantaneously and accurately between HR, payroll, benefits, carriers, and third party administrators is essential in this new world dictated by the ACA. 

What challenges do you face in meeting the 2015 ACA reporting requirements? What steps have you taken?

[1] U.S. employers under the Affordable Care Act (ACA) must make many decisions. Most importantly, at this time, is to decide whether it is financially and competitively advantageous to offer health coverage? This decision is called “Pay or Play”.

Topics: ACA Accountable Care Act reporting automation
2 min read

ACA Employer Mandate Delays Update - 2015 Is Not That Far Away.

By Prime Care Tech Marketing on Wed, Jul 09, 2014 @ 10:30 AM

It's Time to Refocus

istock_000034653330small_croppedOn July 2, 2013, the Obama Administration announced that it would postpone until 2015 the implementation of two key elements of the Affordable Care Act (ACA).  These two elements pertain to the reporting requirements for large employers (50 or more full-time equivalent employees) that determine whether or not employers provide affordable, qualified health coverage to full-time employees:

  • Section 6055 - the reporting by insurers, self-insuring employers, and other parties that provide health coverage
  • Section 6056 - the reporting by certain employers concerning the health coverage they offer to their full-time employees.

Employers that fail to do so will be assessed a “shared responsibility” (pay or play) penalty.  The Administration’s decision to postpone these reporting requirements were dictated by the complexity and technical challenges of the reporting requirements and the Treasury Department’s failure to issue formal guidelines for these issues.   Originally, these provisions were set to be implemented on January 1, 2014.

(Note: Since the July 2nd decision to postpone, the provisions have been delayed until 2016 for small employers1 with plan years beginning before Jan. 1, 2016.2)

The postponement of the ACA provisions was generally well accepted and appreciated by large employers. The July delay, coupled with the negative publicity of the health insurance exchanges, allowed employers to further delay implementing benefit changes to conform to the law. Many employers are just starting to formulate plans to meet their desired conformity level. This means that the first six months of 2014 are going to be extremely busy in the benefit’s arena. Employers are going to want a tremendous amount of information, pricing for plan changes, contract changes, employee communication material, system updates, etc. An additional real problem is that they’re going to want the work completed and ready for open enrollment periods in the last quarter of 2014.

We strongly urge employers to begin now. Plan and make necessary or desired changes to your program as soon as possible. Even if you delay implementing the changes until closer to 2015, we recommend you plan to do so now to avoid the chaos and backlog that will occur in the last quarter of 2014. Each employer will have different needs and learning curves regarding the ACA so a six month planning, scheduling, and implementation window is realistic.   The timetable below is for your review. Take a look at it and determine where you think your company’s efforts fall on the chart.

Do keep in mind that, assuming no further delays, "Pay or Play" penalties for non-compliance start January 1, 2015. Don’t delay!  Start now!

What has your company done to comply with these imminent requirements?

1The Affordable Care Act defines a small employer as having at least one but no more than 100 employees. However, it provides states the option of defining small employers as having at least one but not more than 50 employees in plan years beginning before Jan. 1, 2016.

Generally, if you have fewer than 100 employees (using the definition for full-time equivalents) you will be purchasing coverage in the small group market.

2 Starting in 2015, employers with 50 or more full-time employees or equivalents that do not offer coverage to their full-time employees face a penalty of $2,000 times the total number of full-time employees (minus 30) if at least one full-time employee receives a premium tax credit/subsidy to purchase coverage through a government-run health insurance exchange established under the PPACA. (SHRM article dated July 3, 2013)

Topics: ACA Pay or Play Accountable Care Act large employers small employers


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