This year, the Affordable Care Act brings new and complicated reporting requirements for employers, and the information is due next January. “The effort required to implement the reporting can be significant, and if employers do not implement a solution soon for meeting these requirements, they may have significant risk for reporting penalties and underlying ACA excise taxes,” a recent survey warns.
The survey, which PricewaterhouseCoopers and Equifax Workforce Solutions conducted during the first quarter of 2015, found that only 10 percent of participants now have an in-house solution for ACA reporting requirements, and 16 percent “have not yet even considered a solution or do not know what solutions they should consider.”
As employers consider the strict and detailed reporting requirements and the multiple systems that may currently house this information, a move toward outsourcing this reporting is evident. “Employers will need to make a business decision as to how to collect the necessary data in year one and then create an on-going process for future years,” the survey found.
About 20 percent of small employers are considering outsourced solutions, but that number grows with the size of the employer, the survey found. Closer to 30 percent of medium-sized employers are talking about outsourcing. That number is 37 percent of large employers, and nearly 15 percent of large employers have already committed to vendors. Nearly 50 percent of smaller companies that plan to outsource the reporting are doing so through their payroll vendors, the survey found, and so will about 25 percent of medium employers. About 35 percent of large employers plan to outsource the work to a vendor dedicated to ACA compliance.
As employers consider their options, as well as the complexity of the reporting they’ll need to do, they should aim for real-time tracking of employee data, Jamie Walker writes for Employee Benefit News. ”The ability to have real-time reporting is critical,” he writes. “This will allow employers to look at the standard measurement and stability periods so they can appropriately manage the employee population and project costs.”
Though the reporting requirements are a challenge, Martin sees opportunities for those who are prepared. “Organizations that plan ahead and select the right benefits technology platform should be able to easily take them in stride,” he writes. “The time to get moving on this is now. Otherwise, employers will be staring at a big, confusing pile of paperwork down the road.”