New regulations and workforce challenges in today’s business environment can make it feel like we are driving at full speed through a rapidly shifting landscape. In particular, the ACA is proving to be a major roadblock for many organizations. Although we have received many warnings, it seems that the ACA reporting requirements have caught organizations off guard.
Many organizations have not yet developed a sound strategy for managing the new requirements. In fact, a recent report by PWC found that only 10% of organizations have implemented an in-house or outsourced solution for managing their ACA reporting. This is concerning considering that the monthly data collection should have begun more than six months ago in order to meet the reporting requirements in early 2016.
The number one ACA compliance concern on the minds of businesses, both large and small, is data quality. Specifically, 65% of respondents indicated that data quality was a main compliance concern. This concern is not unfounded. The average organization is utilizing 3-4 separate systems to accomplish their HR and Finance functions. The ACA calls for new methods of data collection and reporting that require multiple systems to work together as one, sharing information and producing unique metrics.
Organizations with outdated, or pieced together solutions need to act quickly to unify their data in a single database for 2016 reporting, and beyond. The process of aggregating the data manually will require a significant effort for any organization. Furthermore, it opens up the organization to significant risks of reporting penalties and excise taxes that can range from thousands to millions of dollars if the integrity of the data cannot be confirmed.
For these reasons, the majority of organizations are considering outsourcing the process. Still, 16% of organizations reported that they have not considered a solution, or do not even know what solutions they should consider. Although the IRS Forms 1094 and 1095 are not due until early 2016, completing them requires month-by-month data for the entirety of 2015.
Unfortunately, some vendors are taking advantage of the unpreparedness of many organizations, charging upwards of $15,000 for new modules, dashboards, and other pieced-together packages that companies must buy as further additions to their HR and Finance systems. These tools will not fix the root cause of the problem as organizational data will remain siloed by departments, increasing the risk of errors and inconsistencies.
Today’s organizations need to simplify and modernize with a single source of truth for information and analytics across departments. A fully unified HCM and Payroll system that handles all aspects of the employee lifecycle will ensure compliance by unifying data in a single database, putting all organizations on the right path to compliance. The best part? They might even perform ACA reporting and forms processing services at no additional cost.