The ACA and Time Tracking Compliance: What CHROs Need to Know
The Affordable Care Act (ACA) time tracking compliance requirements present complications for CHROs, particularly at organizations where variable employee hours are common. As of 2015 for large organizations and 2016 for midsized organizations, employers are required to designate every employee's status as full-time or part-time, according to ADP Research Institute. Under the ACA, an employee who works 30 hours or more each week is designated full-time and qualifies for minimum coverage.
While organizations with 100 or more employers were required to comply with time tracking requirements in 2015, 2016 is the first year the changes have been implemented at organizations with 50 to 100 workers. For employers who are working to meet this year's electronic ACA filing deadline, taking quick steps to implement the right time tracking measures can be crucial to compliance now and in the future.
How Does the ACA Affect Time Tracking?
While employers have the ability to classify certain employees as part-time or full-time right off the bat, some individuals with variable or seasonal schedules may require time tracking. According to HR Benefits Alert, employees who work "120 days" or fewer per calendar year can be classified as seasonal and excluded from time tracking requirements.
Employees with variable hours must participate in time tracking during a "measurement period," defined by workforce management consultants FuseWorkForce as a 3-to-12-month period of consecutive months. After the conclusion of the measurement period, employers are provided with up to three months to complete calculations to determine whether an employee's weekly work hours exceed 30.
After the conclusion of the "measurement period," employees who are deemed eligible for shared responsibility health care coverage under the ACA should be monitored during a "stability" period. During this period, they must remain eligible for full-time status for a period between 6 and 12 months in length, but not to exceed the length of the measurement period.
Complying with ACA Time Tracking Requirements
Time tracking isn't the only action required for ACA compliance, but it may be among the most complex. Risk management consulting firm Marsh & McLennan describes the ongoing effort to track the hours and status of variable employees correctly as one of the most "complicated—and potentially costly—issues that large employer's face." While the time tracking rules are only applicable to organizations with variable employee schedules that do not fall under seasonal guidelines, the regulations affect CHROs at a number of large and midsized organizations.
Organizations without variable employee scheduling may not be required to meet time tracking compliance requirements. At companies who do fall under ACA requirements for time tracking, large classes of employees may have sufficiently consistent work hours to negate a need for time tracking. However, for consistency in record keeping, CHROs implementing time tracking technology or software should consider an enterprise-wide implementation for record keeping. In addition to being able to collect the data necessary for ACA compliance, full-time and part-time workers can benefit from improved task management and better work flows, while HR teams appreciate simpler payroll and cost management.
The time tracking requirements of the ACA have necessitated some significant shifts for organizations to achieve time tracking compliance. In order to avoid costly penalties, CHROs should consider wholesale implementation of time tracking technologies to ensure their eligible employees are effeciently identified and offered coverage.