Many companies start managing Affordable Care Act compliance with spreadsheets.

For a smaller company with a relatively simple workforce, a spreadsheet may seem like all you need to track employee information and prepare for ACA reporting.

But as your company grows, managing the process manually can become increasingly difficult.

• Employee data changes throughout the year.
• Part-time employees may become full-time.
• New employees are hired. Others leave the company.
• Hours worked can fluctuate throughout the year.
• Employees may work across multiple entities or locations.

Accurate data must be tracked throughout the year to help determine eligibility, ensure required offers of coverage are made, and support accurate reporting.

At some point, many companies find that spreadsheets are no longer the best tool for managing the process.

Effective Data Management

When ACA-related data is managed manually, someone must continually collect and update information throughout the year.

A spreadsheet is only as accurate as the information entered into it. If information is stored in multiple spreadsheets or maintained by multiple people, it can become difficult to know which data is current.

• A change may be made in one file but not another.
• An employee’s status may change without the information being updated.
• A missed update can create problems later when it is time to file Forms 1094-C and 1095-C.

The more complicated your workforce becomes, the more difficult it can be to manage compliance manually.

Year-Round Tracking

One of the biggest challenges with spreadsheet-based ACA management is that compliance is ongoing.

It is not enough to collect employee information shortly before filing deadlines. ALEs need to track employee status throughout the year to help determine eligibility and ensure appropriate offers of coverage are made when required.

For example, an employee who works variable hours may not remain in the same classification throughout the year. An employee who initially works part-time may transition to full-time.

A spreadsheet can store information. But it does not necessarily provide the alerts, tracking, and status information needed to help manage compliance throughout the year.

Manual Data Entry

Managing Affordable Care Act compliance with spreadsheets also requires a significant amount of manual data entry.

Information may need to be collected from different sources and entered into spreadsheets. Data may then need to be reviewed, updated, and transferred again when preparing forms for filing.

Every additional manual step creates another opportunity for information to be entered incorrectly or overlooked.

Many businesses have successfully managed their reporting manually. However, the process can become increasingly time-consuming and difficult as the number of employees, entities, locations, and changes increases.

Managing Complexity

Affordable Care Act compliance can become especially challenging for companies with employees who work variable hours, seasonal employees, multiple locations, or multiple EINs.

In these situations, simply maintaining a list of employees is not enough. Employers may need to track information over time and evaluate employee status based on changing circumstances.

As your company grows, the number of rows in a spreadsheet may not be the only problem.

The real challenge is keeping the information accurate and making sure the right data is available when it is needed.

ACA Software vs. Spreadsheets

Comprehensive ACA software is designed to help manage the process more efficiently year-round.

Instead of relying on manual tracking, software centralizes employee data and helps you manage compliance throughout the year.

Passport Software’s ACA software helps track employee eligibility and provides status reports that can alert you when offers of coverage may be needed. The software is designed to help you maintain accurate data throughout the year rather than waiting until filing season to identify potential problems.

This can make it easier to identify issues before forms are prepared and submitted.

ACA software can also simplify the filing process. Rather than manually compiling and organizing large amounts of information at the end of the year, employee data can be managed in a system designed specifically for ACA compliance and reporting.

For companies that want to reduce the amount of work they handle internally, Passport Software also offers an ACA Full Service option. Simply provide a spreadsheet with employee information, and the service handles the rest, including filing.

Updating Your Process

If managing compliance manually has become time-consuming, you do not have to wait until the next filing deadline to make a change.

The months between filing seasons provide an opportunity to review your current process and determine whether it is still working well for your company.

Ask yourself:

• How much time does your company spend managing compliance data?
• How many people are involved in collecting and updating information?
• Are you tracking employee status throughout the year?
• How do you know when an employee may need an offer of coverage?
• How much time is spent reviewing data for errors before filing?

If the answers point to a process that is difficult to manage, ACA software can help.

Easier to Manage

Spreadsheets can be useful tools, but they are not designed specifically for managing the ongoing requirements of Affordable Care Act compliance.

As your company grows, manual tracking can become more difficult. Employee information changes. Eligibility can change. Data must be maintained and reviewed throughout the year.

ACA software can help centralize data, streamline tracking, provide status information, and simplify reporting.

If your company is spending too much time managing compliance manually, it may be time to consider a better way to manage the process.

Passport Software offers IRS-certified ACA software for companies that want to manage the process in-house, as well as a Full Service option for businesses that want to outsource the process.

Learn more about how Passport Software’s ACA software and services can help simplify compliance and reporting. Or contact us – we are here to help.