Now we’re really at the beginning of the compliance process. Based on the prior blog posts regarding what data you need for testing and reporting you know that there are a lot of components involved and a lot of data to collect, track, and maintain.

You need to collect health care eligibility information. This is information regarding both the employee and the dependent. What were employees offered? Have they elected coverage? Have they waived or declined coverage? Do you have all the demographic information (name, address, Social Security Number, etc.)? Are all the dependents enrolled in your plan(s) eligible? Remember you are reporting on a calendar year, so you must keep records from those employees that have termed employment during that period, as well as the records from current and new employees.

You need to collect information related to time & labor management – hours worked including paid holidays, sick leave, personal time off, etc. Can you easily recall hours worked by month? Do you know when employees are approaching a possible status change, either a full-time upgrade or a part-time downgrade?

You need to know payroll. Determining affordability, even using the safe harbor methods, relies on knowing employee payroll information. If you don’t use an internal payroll system, now is the time to determine what your payroll vendor can help you with. You may need to decide if an alternate solution is required if your current vendor can’t provide the necessary data and reports.

You need human resources information. What are your plan offerings? Are they minimum value plans? How are you managing turnover? What are your HR policies? What do your contracts say? You need to collect this information and determine how it impacts your compliance.

Also, consider the length of time you need to retain this information. When you account for the timeframe between the beginning of the measurement period through the time you submit your IRS filing there is a span of several years. What if you were audited? Can you easily retrieve the data used during the measurement period that caused you to make decisions for your stability period? This is where technology can be critical for maintaining information.

The requirements necessary for testing and report should trigger a call to action for setting up a system or internal process for tracking and testing this information.

Next week we’ll wrap up this ACA Pay or Play overview with a look at the ongoing process.