Are you looking to improve your business efficiency through ACA software?
The Affordable Care Act (ACA) became law in 2010, and since 2015 businesses have had to comply with its requirements by providing the IRS with employee data each year.
For some businesses — in particular, Applicable Large Employers (ALEs) — the extra reporting requirements cost extra time and money and cause quite a few headaches.
Automated ACA software can help simplify the process and improve your business efficiency. Read on to learn how.
What Is the Affordable Care Act (ACA)?
The Affordable Care Act (ACA) is a law that helps provide health insurance to Americans. It's also known as the Patient Protection and Affordable Care Act.
Passed in March 2010, the ACA seeks to do the following:
- Improve healthcare quality
- Expand healthcare coverage
- Change regulations in the insurance industry
Healthcare coverage has certainly expanded since more Americans have health insurance now than at any time in the past.
Before the ACA, about 16% of Americans lacked coverage. In 2016, that number dropped to 9%. That number includes young adults under 26 who were allowed to remain on their parent's insurance plans.
The quality of healthcare coverage has improved alongside changing regulations in the insurance industry.
For example, prior to ACA, people with pre-existing conditions such as cancer and diabetes found it hard to find health insurance. After ACA passed, those same people gained coverage more easily.
How the ACA Affects Businesses
The ACA expanded healthcare coverage to millions of employees around the country.
It also expanded the amount of data that businesses need to stay on top of each year.
This is particularly true for Applicable Large Employers (ALEs). An ALE is a company with 50 or more full-time employees. All ALEs are required to report specific ACA data to the IRS each year.
For the person in charge of ACA compliance, that can be a big task.
In most ALEs, the person in charge of compliance is an HR professional, and most HR professionals are already quite busy. Their days are full of recruiting new applicants, screening and interviewing them, and managing employee relations alongside compensations, benefits, and training.
It's a lot.
On top of that busy schedule, you can add the extra work caused by the COVID-19 pandemic. And, on top of all of that, you can add the need to comply with all ACA regulations while staying up to date with any changes.
It's easy to see how it can quickly become overwhelming.
In short, the ACA affects businesses by creating the need for accurate reporting in a changing environment where mistakes lead to costly penalties.
How the ACA Affects Business Efficiency
Business efficiency is all about optimizing your use of time and resources. Creating the most output (products, services, etc.) with the least amount of input (time, capital, etc.) is the goal.
Staying compliant with ACA regulations can bring down your business efficiency because it takes quite a lot of time (and hence, money) to track and report everything.
This is especially true for those who choose the manual route of combing through employee data. Manually tracking and reporting ACA data isn't impossible. However, it's a lot slower and far more likely to result in errors— costly errors.
How ACA Software Can Improve Your Business Efficiency
Keeping track of the necessary ACA data for 50+ employees is complex and time-consuming. This is particularly true if employees work variable hours at variable locations with variable rates of pay. Or, if you rely on seasonal workers.
Automated ACA software can simplify that process immensely.
Instead of searching through payroll slips and sheets to perform variable hourly tracking, you can have all that information collected in one automated place. This can dramatically simplify ACA reporting.
On top of that, ACA software can improve accuracy, keep you updated with regulation changes, and help you stay compliant.
One example is The Good Faith Transition Relief. Before 2021, this provided some wiggle room for mistakes. Basically, the IRS waived penalties on employers who had good reason for missing deadlines.
However, in 2021, that relief program ended. That means mistakes such as missed forms and putting down the wrong taxpayer identification numbers (TINs) can result in costly penalties.
With its automated forms and efficient employee management, ACA software makes it easy to send timely and accurate information to the IRS.
And of course, it will keep you updated with any changes in regulation.
When determining if the cost of ACA software is right for your ALE, it's important to take into account three things:
- the cost of the ACA software itself
- the amount of time saved by the ACA software
- the potential savings that come from avoiding future penalties
Only when all three are added up can you get a good picture of how ACA software can improve your business efficiency.
Automate Your ACA Reporting With Points North
ACA Reporter, Points North's Affordable Care Act tracking and reporting software, makes it easy to stay compliant with all ACA requirements. It does this by helping you track, report, and analyze all the necessary data.
Employee data is easy to track with ACA Reporter. After it's tracked, our ACA software includes automated forms and automated code calculations that make reporting the data incredibly simple.
Finally, you're provided with an analysis of the entire process. This ensures that you're on track with the ACA requirements. If you fall out of compliance with the regulations, then ACA Reporter will not only let you know, but it will also provide an actionable set of steps for getting back in compliance. Points North also has a dedicated ACA Reporter Customer Support team to assist you correctly tracking your data and meeting year end reporting requirements.
Points North developed ACA Reporter to cover all your ACA needs. Reach out to us to learn how it can help you.