Why Human Capital Management is your answer to ACA
The Affordable Care Act (ACA) and its impact to the HR world is one of the hot topics in the HR Industry this year. The message from the IRS is clear – comply with ACA’s employer shared responsibility or pay steep fines. In Q1 of 2015, PwC and Equifax surveyed around 500 companies to understand how employers are planning to comply with ACA reporting requirements. This is the most detailed study on ACA from employers up-to-date, read it here.
Some key stats from the study:
- 82% of participants indicated that the human resources department is leading the ACA reporting compliance effort.
- 43% of participants want to avoid responding to exchange notices because their employees apply for subsidized insurance. This means HR needs to be on top of all things ACA.
- Even though only 31% reported data security as a concern in meeting compliance, IRS reporting data includes sensitive information such as social security numbers and date of birth etc. What this points to is having an external vendor just for ACA would increase data risk. This leaves your payroll or HRIS solution provider as your best bet to have a safe answer to ACA.
With these findings in mind, let’s see why a complete HRIS solution is best.
ACA compliance is complex and involves data from multiple HR functional areas. For example, data from the time and attendance functional area is required to determine the eligibility of an employee for ACA, or Full Time Equivalency (FTE) calculation, while having affordable benefits plans and monitoring the offered status involves the HCM Benefits functional area. Moreover, the data needs to be monitored continuously for determining eligibility and reported on monthly basis. If you have multiple systems for managing each of these functional areas, enormous amounts of time and energy would be spent in managing and consolidating the data between these point solutions. Hence, the need for one complete HR solution that tracks your employee hours, manages benefits and reports data is key.
FinancialForce HCM offers the best ACA solution in the market:
Firstly, FinancialForce HCM offers a complete solution for managing the entire HR functional area and provides a unique ACA Summary Dashboard that displays all the information required to comply with the ACA. FinancialForce’s Time and Attendance tracks employee time, while the benefits administration module helps you configure benefit plans that meets affordable criteria. Additionally, it offers a benefits enrollment module that helps you offer coverage to your employees and tracks if it’s accepted or waived. All of this information is displayed in one powerful ACA dashboard.
Secondly, HCM assists your organization in meeting compliance by:
- Always showing where you stand on ACA – as your organization grows or changes, HCM dynamically tracks the number of full-time equivalent workers from our timesheets data, percentage of benefits offered, and percentage covered.
- The ability to view an individual worker’s ACA status at any point in time and record who has been offered health coverage.
- Tracking the benefit plan options provided by your organization that meet minimum essential coverage, minimum value ACA specification and affordability criteria.
- Providing self service enrollment for employees in the ‘My Benefits’ dashboard (available on mobile too)
- Reportable data to allow you to easily complete IRS forms.
The ACA dashboard is artistically designed to have all of this information with point in time display of data. Moreover, ACA flexible settings allows you to modify changes in IRS policy such as 75% accepted coverage in year 2014.
Thirdly, the solution also goes beyond the realm of ACA in terms of reporting and analytics that provides strategic insights for business decision. For example, a sample dashboard below shows full-time headcount vs seasonal/part-time headcount on a month-on-month basis. Over the period of time, this data can be helpful in identifying the trends and business cycles to give you predictive capabilities for workforce planning.
Interested in learning more about The Affordable Healthcare Act and how it affects you as an employer? Read our newest ACA Employer Guide here.