6 Items You Need For an ACA Compliance Inventory


Q: What does the CHRO of a large university system, a mid-sized manufacturing firm, a Fortune 500 consumer finance organization, and a renewable energy start-up have in common?

A: They are all struggling to ensure their respective organizations are in compliance with the ACA (Obamacare) as the law continues to roll out. 

There are many obstacles and by the nature of these uncharted nuances of this exercise, there is little information out there that has the weight of proven experience behind it. That said, nextSource has tapped its internal pools of subject matter expertise to compile the following ACA Compliance Inventory.

The inventory details all the items an organization must consider to ensure they’re compliant with the rules. 

Item – Understanding the Requirements
The first item on the inventory is researching your organization’s requirements under the law.  Rules differ depending on the number of employees within the organization as indicated below:

  • Organizations with less than 25 full-time equivalent employees.
  • Organizations with less than 50 full-time equivalent employees.
  • Organizations with 50 or more full-time equivalent employees.

Companies with fewer than 50 employees are exempt from penalties assessed for non-compliance.  Those with fewer than 25 workers may be eligible for tax credits if they provide healthcare to their employees.  For those organizations with greater than 50 employees, one of the following two options must be provided to all eligible employees:

  • Minimum Essential Coverage (MEC) to at least 95 percent of eligible employees. Failing to do this can result in an annual penalty of $2,000 per employee for all employees.
  • An affordable plan with a minimum value of at least 60 percent. Eligible individuals who are not offered an affordable option and receive a government subsidy can trigger a penalty of $3,000 annually.

Item – Identifying and Involving Key Stakeholders

ACA compliance for any size organization will require cross functional collaboration between several key departments. Make sure to establish communications channels and processes so that the following departments will be prepared and able to interface on all things related to ACA compliance:

  • HR & Workforce Management
  • IT
  • Finance
  • Payroll & Benefits

Item – Eligibility Identification Process

Identifying who is eligible requires proper co-ordination between numerous departments to ensure each resource is properly identified.  Develop a standardized process for determining eligibility and ensure it is enforced consistently at each location and via mail/email to those working by remote. Particularly for large and decentralized organizations such as higher education institutions which often have highly diversified workforces including FTEs, independent contractors, SOW workers, remote resources and multiple campuses, it is crucial to properly identify who is eligible for coverage.

Item – Create an ACA Implementation Plan

The eligibility determination process described above is one of the pieces of the implementation plan. Even before that can happen, it is advisable to hold education and training meetings with all HR, payroll and benefits personnel to learn about the ACA’s requirements and to educate them on the new policies and practices developed to ensure proper compliance. If the organization is using any software solutions, this would be the appropriate time to modify configurations to include ACA compliance items so that these new requirements can be conveyed to users in all relevant departments.

Item – Establish ACA-specific Communication Channels

Having clear channels for ACA related communication across the organization is key to ensuring compliance doesn’t get overlooked in favor of convenience.  If there are well-known channels through which questions, challenges and other issues are handled, users will be inclined to use them.  If not, they may carelessly be swept under the rug. These channels should also be used to keep key stakeholders and executive management informed of progress made to ensure compliance with ACA.  Having formal channels to record all this activity provides an audit trail to protect the organization should an audit be necessary.

Item – Reporting and Audit Procedures

Develop a robust means for leveraging recorded communications as part of an internal audit program. Performing internal audits at regular intervals not only prepares the organization for responding to an actual audit, they also prepare for the regular reporting required by the ACA. Proving to the IRS that the organization is indeed compliant with all the regulations requires accurate and validated information.  Having ACA specific communications channels and a regular internal audit schedule makes adhering to ACA-mandated reporting easy.

More Articles