What Is the Best Type of Obamacare Software Solution for My Organization?
Shopping for Affordable Care Act software is a lot like installing a new shower: your goal is to get a solution that leaves you feeling clean, and the plumber wants to talk about the plumbing, accessories, and where the water is coming from. You can shower with a watering can just the same as in a private suite at the Ritz. The difference is in the experience.
So, how does this whacky analogy translate to how you shop for an Obamacare software solutions?
At this stage in the market, we’ve seen an assortment of different ACA software options hit the shelves, and nearly all of them complete the paramount task of building and filing your 1095/1094-C forms. That’s a no-brainer.
Rather than comparing vendors by output, employers are comparing them in their mechanism for gathering the required data they need, and seeing how they can do it as efficiently and cost-effectively as possible. In other words, employers are evaluating ACA solution vendors in their ability to plug their solution into their current "plumbing" network of payroll, time and labor, and benefits administration. Employers are shopping for a compliance experience.
Some employers need the "luxury shower" ACA solution, where others may be perfectly satisfied with the "watering can". Obamacare solutions on the market today offer various levels of automation, integration, consultation, and manual intervention required to funnel the required data into their system to perform the required testing and reporting. Based on your business needs and budget, your ideal ACA solution will fall into one of the following 5 categories.
1. The Fill-Your-Own Report Builder and Filer
This first ACA Software solution is the “15 pieces of flare” (Office Space anyone?) of ACA solutions. While it churns out completed 1095-C returns and electronically files on your behalf, it assumes no liability for accurately coding the forms. A demographic upload file will populate Part I of the 1095-C, but the employer is responsible for typing in the coding and dependent information for Parts II and III. Similarly, the employer will complete the 1094-C.
Using this reporting tool means the employer will be responsible for separately tracking employee measurement periods and making their own monthly compliance determinations.
2. The Smart Report Builder and Filer
This ACA software option is the next step in automation. While it requires a heavier dump of data than the first solution, it has built-in logic to auto-fill your 1095-C and 1094-C forms, and file electronically with the IRS on your behalf.
Like the first option, the employer will retain responsibility for monthly testing and compliance determinations, but enjoys reduced requirements for in-house regulatory expertise.
3. The Stand-alone ACA Testing, Tracking, and Reporting tool
Employers using this option enjoy the benefits of a system that tracks employee measurement periods, conducts monthly compliance testing, auto-fills their reports, and files electronically with the IRS. Like option 2, there is a similar data upload required on behalf of the employer. On a monthly basis, employers are responsible for updating employee hours, enrollment, and coverage offer information in order to get an accurate snapshot for monthly testing purposes.
4. The Partially Automated Solution
This solution has the same functionality as Solution 3, but provides partial automation by drawing data from a payroll, time and labor, or online employee benefits software. With a payroll or time and labor integration, the hours and full-time employee determination would be an automated process, and employers would have to manually update coverage offer and enrollment information. If using an ACA solution that is an extension from an online enrollment application, the employer would be responsible for uploading employee work hours into the system.
5. The Fully Automated Solution
By far, this is the most efficient ACA Software option with the lowest risk of reporting errors. In this option, the ACA solution draws employee hours, salary, and employee contribution data from payroll, and pulls coverage offer dates, dependent information, and enrollment status from an integrated online enrollment tool. It auto-populates 1095/1094-C forms, and electronically files on your behalf. Furthermore, it maintains a clean audit trail from which to run reports in the unfortunate case of an IRS audit.
The greatest savings realized in in the reduced labor, opportunity cost, stress, and compliance risk associated with ACA compliance demands.
To wrap this up, while there are a few feature differences in the ACA solutions on the market today, picking a solution is less about features and more about the "plumbing hookup." There is a real cost associated with solutions that are less integrated and require more manual intervention for data gathering. Assess your current procedures, and see which of the five solution types best fits your needs.