Outsourcing ACA Compliance: What Clients Need Most

Outsourcing ACA Compliance: What Clients Need Most

The Affordable Care Act (ACA) introduced a complex web of compliance requirements for employers, and for many businesses, navigating this landscape can be overwhelming. Whether you’re a small business or a large corporation, understanding the intricacies of ACA compliance is critical to avoid penalties, reduce administrative burden, and stay ahead of regulatory requirements. This is where outsourcing ACA compliance to a trusted provider like ACA-Track becomes essential.

In this blog post, we’ll dive into why outsourcing ACA compliance can be a game-changer for businesses, what clients need most from their ACA compliance solution, and how ACA-Track can streamline this often complex process.

What Does ACA Compliance Mean for Employers?

Before we discuss outsourcing, let’s break down the key requirements of ACA compliance. The ACA mandates that Applicable Large Employers (ALEs)—companies with 50 or more full-time equivalent employees—must offer affordable health insurance that meets minimum value standards. Additionally, ALEs must report detailed information about their health insurance offerings to the IRS using Forms 1094-C and 1095-C.

Failure to comply with ACA regulations can result in hefty penalties, including Employer Shared Responsibility Payments if coverage isn’t offered or isn’t affordable, as well as fines for errors or delays in filing required reports.

This is where the need for accurate tracking and reporting becomes paramount.

Why Outsource ACA Compliance?

Managing ACA compliance can be an extremely resource-intensive process. Employers must track hours worked by all employees, monitor eligibility, and accurately report the necessary data to the IRS—all of which require a great deal of coordination between departments like HR, payroll, and benefits administration.

Outsourcing ACA compliance allows businesses to leverage expert knowledge, advanced technology, and dedicated support, freeing up internal resources to focus on core business functions. Here’s what clients need most from an outsourced ACA compliance provider:

1. Accuracy and Efficiency in Tracking Employee Hours

One of the most challenging aspects of ACA compliance is tracking the hours worked by all employees, particularly part-time and variable-hour workers. For many employers, maintaining accurate records for employees who may not work consistent hours, or who work across multiple departments or systems, can be a logistical nightmare.

With ACA-Track, this becomes a breeze. The platform collects actual hours worked for all employee types—whether full-time, part-time, paraprofessional, or substitute—across multiple systems, including timekeeping software, manual time sheets, automated time clocks, and payroll systems. ACA-Track integrates seamlessly with most payroll and HRIS systems, providing real-time data that keeps your records accurate and up-to-date.

2. Simplified Monitoring of Employee Eligibility

The next challenge lies in monitoring employee eligibility for health insurance coverage. Under the ACA, employees who work 30 or more hours per week on average are considered full-time and must be offered coverage. ACA-Track simplifies this by providing real-time alerts when an employee’s hours exceed eligibility thresholds, ensuring you don’t miss any compliance deadlines.

This is especially important when managing a mix of full-time and variable-hour employees, where errors in eligibility could lead to significant financial consequences.

3. Reliable and Comprehensive Reporting

Once eligibility and hours have been tracked and monitored, the next step is reporting the data to the IRS. The ACA requires ALEs to file Forms 1094-C and 1095-C, which provide detailed information about health coverage offers to employees. This is a time-sensitive process, with strict deadlines for delivering forms to employees and submitting them to the IRS.

ACA-Track excels in this area by automatically generating the required IRS reports, which can be filed electronically. It also generates individual 1095-C forms for employees, ensuring they receive the proper information for their tax filings. This ensures that your business is compliant, avoiding costly penalties for late or incorrect submissions.

Moreover, the system maintains all ACA compliance data in one central location, making it easy to retrieve in case of an IRS audit or state healthcare exchange request.

4. Error Correction and IRS Submissions

Mistakes can happen, and when they do, you’ll need a system in place to fix them. ACA compliance is no different. ACA-Track offers robust tools for identifying and correcting errors in your ACA reporting. Whether it’s incorrect employee data or reporting mistakes, ACA-Track helps you fix any issues before submission.

Additionally, if you receive penalty notices, like IRS Letter 226-J, ACA-Track can assist you in addressing the issues quickly, ensuring that all necessary documentation is in place for a thorough defense.

5. Scalability and Flexibility

Not all businesses are the same, and ACA-Track understands that. Whether you’re a small business or a large enterprise, the platform scales to meet your specific needs. With features like customizable dashboards and user interfaces, you can filter, group, and sort your data to get the exact information you need, when you need it.

The platform’s flexibility allows you to configure your system to track the measurement periods, stability periods, and other factors specific to your company. This flexibility ensures that your ACA compliance solution is tailored to your exact requirements, no matter the size or complexity of your workforce.

6. Security and Data Privacy

When it comes to handling sensitive employee data, security is paramount. ACA-Track ensures that all personal identifying data is encrypted in the database, offering peace of mind that your employee’s information is safe. The platform is also compliant with industry standards like SOC 2, and it uses secure HTTPS protocols for all data transfers, minimizing the risk of data breaches.

Furthermore, ACA-Track ensures that no HIPAA-based medical information is stored, aligning with data privacy regulations and safeguarding your company from any legal pitfalls.

What Clients Need from an ACA Compliance Partner

In choosing a third-party ACA compliance provider, businesses need to prioritize the following:

• Proven Expertise: ACA compliance can be complicated. Businesses need a partner with a track record of handling ACA-related complexities and a deep understanding of IRS regulations.

• Seamless Integration: A successful ACA compliance solution must work well with existing systems, such as HR, payroll, and timekeeping software.

• Support: Reliable customer service is crucial. ACA-Track offers a dedicated Client Success Advisor to guide you through any questions or challenges.

• Scalability: Your ACA solution should grow with your business, whether you’re a small company or an enterprise with thousands of employees.

• Cost-Effectiveness: ACA compliance is not just about avoiding penalties but also about minimizing administrative costs. ACA-Track offers flexible pricing plans that can be customized to fit your needs.

Conclusion

Outsourcing ACA compliance to a trusted partner like ACA-Track allows employers to ensure they meet all ACA requirements while reducing the administrative burden. From accurate tracking and reporting to error correction and IRS submission, ACA-Track provides the tools necessary to stay compliant, secure, and efficient.

In today’s fast-paced business environment, ACA compliance doesn’t have to be a headache. With ACA-Track, businesses can focus on what they do best, knowing that their ACA compliance is in expert hands.