ACA Compliance Still Matters

People thinking and looking confused.

ADP's recent survey on ACA Compliance reveals that there is a lot of confusion regarding Affordable Care Act compliance.

While news reports talk of changing or eliminating the Affordable Care Act (ACA), it still exists and compliance is required. The IRS identified 49,259 employers that are potentially liable for almost $4.5 billion in penalties for 2015 alone. The IRS has started to send out penalty letters for 2016, and penalty letters for 2017 will begin being sent in spring 2019.

This means that ACA compliance is essential, and getting it wrong can be extremely expensive.

Yet ADP's recent ACA survey reveals there is significant confusion about what the ACA requires, how to comply with ACA eligibility and affordability provisions, and what IRS reporting information to send (and when). For example, 90 percent of respondents did not know how long employers have to respond to an IRS penalty letter (Letter 226J).

Other key insights from the survey are as follows:

  • Organizations are confident that they are compliant and will not have problems. This may be because enforcement is just starting.
  • There has been significant skepticism about how long the ACA will last and whether penalties will actually be enforced. Fast forward to today — the employer mandate and reporting requirements remain in place and the IRS is actively enforcing the employer mandate.
  • There is a great deal of confusion about what is required to comply, especially regarding the handling of ACA IRS penalty notices.
  • Most organizations continue to see ACA compliance as a burden that diverts valuable time and resources, rather than an opportunity for internal reflection and improvement.
  • A significant hurdle to ACA reporting is collecting the data needed from different systems and making it usable for ongoing analysis of eligibility and affordability of healthcare benefits.
  • Most respondents say that they will not change their healthcare benefit offerings if the ACA is repealed.

ADP asked the survey respondents to describe their challenges with ACA compliance in their own words; most of the comments expressed frustration with data, keeping up with changes and the time required:


  • "The most challenging aspect of compliance was data. We encountered a bit of an issue with inaccurate employee data, and in some instances data was completely missing."
  • "We have many employees in many locations, and we use multiple systems across these locations for gathering and tracking data."
  • "Data collection and reformatting for submission to vendor."


  • "It seems like the rules/guidelines are always changing, and I am never sure if I am up to speed."
  • "Uncertainties of GOP changes."
  • "Compliance regulations can get confusing in misunderstanding of applications or effects of ongoing legal decisions."


  • "Sheer volume of items to deal with."
  • "All the paperwork and phone calls."
  • "Understanding the details and finding employees who have time to focus on ACA work."

Compliance challenges also shift with size. Employers with 50-150 employees say the data review, completing year-end forms (IRS Forms 1094-C and 1095-C) and finding affordable coverage are their top challenges.

Employers with 151-999 employees say the time needed to monitor, analyze and report is their biggest issue. Larger employers, from 1,000-5,000, find the ongoing determination of eligibility most difficult. Organizations with more than 5,000 employees say the lack of a clear, streamlined process for compliance is the largest challenge.

Each of these challenges can make ACA compliance both difficult and expensive, so if you are confused about what you should be doing, you are not alone. If you have received a penalty notice (IRS Letter 226J), promptly get expert help and respond.

Take the Quiz

Whether or not you're certain you have it down, take our ACA compliance quiz and see how your knowledge compares to our survey respondents. After taking the quiz, you'll have the opportunity to see your results and get a copy of the ADP report: ACA Compliance: Confidence, Confusion, and Change.