Employers Spent An Average Of 315 Hours Each On ACA Compliance Last year

Top challenge for business was aggregating required compliance data, survey finds.

Businesses spent an average of 315 hours each last year complying with the employer documentation and reporting requirements of the Patient Protection and Affordable Care Act, though more than one-third of companies spent less than 100 hours on ACA compliance activities.
That’s according to a survey of 179 companies conducted by the Aberdeen Group, a business market research firm based in Waltham, Mass., on behalf of Sovos Compliance, a business compliance consulting and technology firm based in Wilmington, Mass.
Of the surveyed firms, 36 percent said they spent less than 100 hours on ACA compliance last year. Some 34 percent estimated their ACA compliance hours at between 101 and 500 with 15 percent putting that number at between 501 and 1,000 hours and 5 percent saying it took more than 1,000 hours last year to stay on the right side of the health care reform law.
The 2010 law requires employers with more than 50 employees to offer health insurance benefits to their workers. The employer mandate took effect in 2015, and this year the law required all qualifying employers to offer benefits to at least 95 percent of their workers. The law also requires employers to document their compliance with the mandate, including that benefits offered to workers met the ACA’s coverage and affordability standards.
In a separate study released last month and reported in TCB, Accenture, the Chicago-based management consulting firm, estimated that employers may be facing as much as $10 billion in penalties for not properly documenting and reporting their compliance with the ACA’s requirements this year.
The top ACA compliance challenge—cited by 44 percent of the employer respondents to the Aberdeen survey—was “difficulty aggregating all of the needed data” to demonstrate to the Internal Revenue Service that their businesses were following the letter of the health-reform law.
Other challenges cited by the companies were:

  • ACA regulatory mandates changing too frequently (40 percent)
  • Cost of ACA compliance initiatives (25 percent)
  • Inability to meet ACA compliance deadlines (25 percent)
  • Inability to focus on more value-added activities (20 percent) 

Interestingly, most of the surveyed companies said they aren’t going to hire outside help to address their ACA compliance challenges. Instead, they’re going to look inward to solve their problems.
Some 79 percent of the respondents said their top ACA compliance strategy was to “manage with existing resources” followed by “improve knowledge of ACA requirements,” cited by 62 percent of the companies. Other tactics include:

  • Invest in new technology (25 percent)
  • Outsource to a consultant (15 percent)
  • Hire additional resources for ACA compliance (8 percent)

Give the potential penalties described in the Accenture report, the Aberdeen survey results suggest that more people in human resources are going to be spending a lot more time in 2017 ensuring that their companies are in compliance with the ACA’s documentation and reporting requirements.