In life, old often becomes new again. Take fashion for example. Today’s latest trends are typically recycled. Denim designers bring back faded, dark, skinny, torn, embellished, pastels, bell bottoms, etc. They are marketed as the latest and greatest, but it’s simply a repeat; if only we had kept those old jeans, we would already be right on trend!
The same is true in the world of the ACA. The focus of last year, last month or yesterday is ending up, again, the area of focus today. We are finding that some employers just cannot get it right, and what was an old focus is now new again!
In the early days of ACA consulting (WAY BACK in 2013-2014), we spoke with clients about look-back, measurement and tracking to define eligibility. Most of the conversations were with employers with variable hour employee populations: retail, restaurant, hospitality, etc. Those employers understood what a struggle it would be to define compliance through offering the right people the right coverage at the right time. Most other employers assumed their task was not as difficult, so we moved on to the upcoming challenges in the glamorous world of ACA reporting.
2015 was ALL about reporting: managing the disparate data from all an employer’s HR tech systems to be able to populate the IRS forms. For the first time in ACA history (since the requirement of benefit costs on W-2s), we had a tangible to deliver. Tangible outcomes are so much easier to communicate with a “pass” or “fail.” Deliver a form to the right people by the right date, and you could check the task off of your to-do list!
Vendors thought the new ACA “craze” of 2016 would be marketplace subsidy responses, auditing, Employer Coverage Tool (ECT) forms creation, penalty assessments, compliance modeling and maintaining established processes. They were partially wrong. This new focus is being shadowed by going back to the basics of “right people, right coverage and right time.”
The problem is that those forms we focused so heavily on in 2015 were determined to maybe not be so accurate. Unfortunately, with the transition relief of good faith effort out the window, we are focusing yet again (like those comfy worn-in jeans we will never get rid of) on measuring and tracking, offering the right people the right coverage at the right time so we can insert the correct information right on the beloved 1095 form. Most employers are not ready for the subsidy responses or able to accurately create an ECT form or to defend themselves in an audit. They are not able to adopt this new trend as they are going back to their closets (historical data) and trying to make things right.
Employers that did not actually collect and calculate actual hours of service are trying to prove consistency in their employee eligibility determination. Employers realized it was a struggle for workforce management and proactive scheduling to maintain full-time or part-time status to avoid pitfalls in an employee coming on, going off and coming back on the plan.
It might be time to pose the question to even those employers that think they have everything covered as it relates to ACA reporting: do you really have everything covered? Sometimes the best option is to go back to the basics and build your wardrobe from there! The reality is, if an employer captures, reviews, archives the right data and takes action throughout the year … the forms are easy!
The key to a strong ACA compliance foundation is having the right (and clean) data. Utilizing a vendor that can support those efforts can help. Then getting ready each year for the big reporting event will be as easy as getting dressed in your favorite pair of jeans!