What to Look for When Selecting an ACA Software Solution

Published by John Dalmata on December 10, 2014

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Amidst mando compliance in the first year of the Employer Shared-Responsibility portion of the Affordable Care Act (tough to believe right?), we find the market starting to flood with an array of PPACA software vendor solutions. Wonderful news for employers and HR professionals, as complying with the stipulations of “Pay or Play” has been, for many, a source of stress and confusion. Understandable–there is a lot to it. But now that impending penalties are upon us and solutions are increasingly abundant, what are the key criteria to hold against a would-be ACA compliance solution. Indeed, not all ACA software vendors are created equal!

The following list will help you enter any consultation call with someone offering an PPACA software vendor solution!

1. Is it easy to use? The last thing you need is another complex software tool collecting dust and bleeding your budget because no one can figure it out. Does it have a dashboard feature that gives all your key compliance data up front, and are the rest of the features easy to find and navigate?

2. How well does it integrate with your current employee data management system? Can this solution be built out to integrate with my current payroll, time and labor, and employee benefits system? If not, how do you import data into the tool? It is important to clearly understand how much of this process can be automated and how much will be manual. Keep in mind, ACA compliance will be an annual process, and keeping track of the data will be a new daily function of employers and HR professionals. Automation saves time, and I recommend this being a must-have.

3. Does it communicate important compliance information? As employee hours shift, your compliance requirements may as well. Does the system alert you of compliance requirements, or do you have to mine for the data yourself?

Furthermore, does the system retain data, such as benefits offerage dates and waivers of coverage, that you may need to produce in the unfortunate case of an IRS audit? Does the system prompt an employer to offer an employee benefits should they earn a coverage offer at the completion of their measurement period, or does it demand periodic data reviews and analytical scrubbing by HR and benefits professionals.

4. Does the PPACA software vendor perform all the required testing? You have to test that you are offering coverage to all full-time employees and full-time employee equivalents (Test 1), ensure the coverage offered provides minimum value (Test 2), and that it is affordable (Test 3).

5. Does the compliance tool generate all required employee and IRS reports? You could have the world’s best employee benefits package, but if you can’t report it (or report it incorrectly), you may see some nice administrative penalties atop your subsection (a) and (b) penalties.

6. What kind of support does it come with? Does the tool throw software alone at the problem, or does it provide expert consultation to go with it? Are the advisors seasoned in benefits, or are they merely seasoned salespeople? It’s one thing to have a slick ACA software solution, and another to have a team of advisors behind it to help you optimize your employee benefits package.

7. Will it provide the return on investment you are looking for? With the right amount of time and resources, anyone can fulfill the ACA compliance requirements on their own. People seeking an ACA software solution are typically understaffed in their HR departments and looking to save valuable time. Does it have end-to-end automation from data gathering through form submission, or are their time-consuming manual steps along the way?

8. Does the ACA compliance tool come with any added features that help with your day-to-day management of the employee lifecycle? Some tools are one-trick ponies, and others have features that assist with benefits management, payroll, and other HR functions. Finding an ACA software solution could be your gateway from paper to electronic data management for those who have not yet made the shift.

9. What is the implementation process like? Will the vendor provide training for you and your team on the software? How long will implementation take, and will you have someone escorting you through the process? Realistically, implementing an ACA software solution is a 3-5 month process depending on how long it takes for you to gather the data, number of employees, and complexity of benefits offerings.

10. How will the vendor ensure security of your precious employee data? When dealing with sensitive employee data, appropriate cyber security measures are a non-negotiable. Challenge vendors to explain what cyber-security measures they employ to protect their cloud, and how they internally restrict access to client data.

Finally, Demo, Demo, Demo! Now that you are an informed ACA compliance tool shopper, demoing is the best way to kick the tires of both a vendor and their solution. Would be terrible to buy a bridge and find that it comes up 6 feet too short of your solution come reporting time!

For a complete orientation to what an ACA software vendor should do throughout the compliance process, download our e-book: Handy Guide: Finding Your Affordable Care Act Solution.