ACA Compliance: 3 Steps to Help Your Business Make the Grade
ACA compliance has become a major topic in U.S. workforce management. The health care law has created an unprecedented level of regulatory complexity for all businesses operating in the U.S., converting what was once an annual enrollment into a monthly process of keeping track of, and reporting on, data points for every single employee working for you. Complying with the ACA carries heavy costs, not just in additional health care benefits, but there are also indirect costs when setting up a framework to comply with the ACA's ever-evolving requirements. Of course, failures in ACA compliance can also bring you the additional expense of heavy regulatory penalties that you'll want to avoid.
Questions to Help Evaluate Your ACA Compliance
Because of the relative difficulty of this process, there are three big questions you should be asking throughout your efforts to ensure compliance with the ACA. While you might feel prepared now, you may not be ready in the later stages of the ACA's drawn-out implementation.
1. Do you have adequate HCM systems in place, or the ability to manage HCM functions across platforms?
Your HCM systems must have the capability to support your cross-departmental compliance efforts by providing fast and easy access to employee data. Bridge any data silos, especially caused by mergers and acquisitions. The ACA will require you to aggregate information across existing systems and produce quality data sets, so enable your systems to do just that. You should be harmonizing transaction and record-keeping so that these systems can provide all impacted departments with relevant data for ACA reporting and auditing purposes.
2. Do you have a way to constantly communicate changes in the ACA, as well as related changes in your compliance practices?
Again, the ACA is being implemented over several years, so new requirements are coming down the pipeline all the time. It's best if your organization has a way to proactively track and adapt to changes by offering training and consistent communication. This will be the easiest and most efficient way to avoid problems and penalties. As with any change in the management process, when it comes to ACA compliance you are better off erring on the side of too much communication rather than too little.
3. Do you need outside help with your ACA compliance?
If you lack the in-house ACA expertise you need and/or your IT systems are not ready to share relevant data across business areas, then it's vital to seek aid that is beyond the scope of your organization. And it's more than just data sharing: the ACA will require employers to defend their documentation of coverage to avoid penalties. Don't go it alone and face the risk of massive tax penalties. Engage outside partners to help you with both ACA compliance expertise and systems support. Partnering with an external provider that has HCM infrastructure and the right knowledge will allow you to focus on your core business areas and better manage the risks of ACA non-compliance.
Investing in Compliance
What the ACA requires for compliance is investments in internal changes to your business, from the enhanced know-how and collaboration of your people, to the integration of your HCM systems to enable sharing of data needed for compliance efforts. This is in addition to continually communicating relevant new changes in the ACA as it gets implemented over several years and obtaining outside help for your compliance efforts. Meanwhile, your business needs to continue to give priority to growing its top line at a time of massive regulatory complexity. It's not easy, but the investments are a must.
While complying with the ACA may be a costly investment of resources, the costs of non-compliance are even higher. By asking the three questions above as you move forward in the dynamic process of ACA compliance, you will keep yourself on the right track.
