Critical Timeline Considerations When Implementing Obamacare Solutions
When it comes to a software purchase, onboarding and implementation can make or break a user experience. In 2015, first-time Obamacare software adopters are learning just how unique an implementation experience onboarding an Affordable Care Act software vendor can be. For those employers out there still discerning the pros and cons of outsourcing ACA compliance, my aim is to provide a window into the common ACA vendor onboarding experience, and offer some key timeline considerations for making that final decision to outsource.
In 2015, the first compliance period for an Applicable Large Employer (ALE) begins on their 2015 health care plan renewal date. For example, an ALE whose plan renews in October would have an October 1st start date, and would be subject to the potential ACA penalties and IRS reporting requirements from October 1 – December 31 of 2015 (and January 1 – December 31 in all subsequent years).
This does not mean shopping for Obamacare solutions starts on your 2015 renewal date; and here is why.
1. The current industry average for building out a client’s look-back measurement period for identifying their full-time employee population is 7 weeks. For most HR pros wielding a hodgepodge of siloed employee data systems, building this historical look-back measurement period requires a heavy lift of data exports and report scrubbing. In our experience at Benetech, we’ve seen the data collection timeline compounded when working with under-staffed HR or admin teams, or employers heavily reliant on paper systems for tracking employee enrollments and hours-worked.
For those whose employee data rests on an integrated payroll, employee benefits, payroll and time and labor suite, ACA tracking can be as simple as flipping a switch. For everyone else, this is the biggest timeline bottleneck. It’s just a lot of work…period!
2. You can backfill data, but you can’t change the past. If you are a January 1 renewal, and you begin tracking compliance in April, you can adjust your benefits offerings going forward to fill any compliance gaps, but can’t do so retroactively for the first 3 months you failed to offer coverage to a full time employee. Those potential penalties are set in stone.
Related Blog: The 5 Most Requested Features of PPACA Software Vendors
3. The longer you wait, the less value you get out of the tool. If an employer desires for their ACA tool to notify them of compliance gaps and proactively mitigate penalties, the longer they wait to initiate the implementation timeline, the longer they delay on their first batch of actionable information. You can’t nail down your eligible full-time population without the historical data.
On its own, an ACA software can alert an employer of compliance gaps and automate their 1095-C IRS reporting, but the employer will always have to actively use that information to extend a coverage offer or deliberately plan to absorb the potential compliance penalties. Employers waiting until the last minute are, essentially, buying a robust report writing tool, of which they only leverage a fraction of the technology and analytics in year 1.
In short, there are compounding opportunity costs that come with delaying implementation timelines for Obamacare solutions. For more information on qualifying an Obamacare software options, check out our blog “What to Look For in an Affordable Care Act Software Solution.”
