The Affordable Care Act (ACA) requires Applicable Large Employers (ALEs) to adhere to strict compliance standards or face significant penalties. Yet, many organizations remain unaware of the hidden risks tied to ACA compliance — risks that can lead to costly errors, IRS penalties, and operational inefficiencies.
Most solutions on the market today promise to handle compliance effectively, but in reality, they often fall short. Whether it’s incomplete filings, inaccurate affordability calculations, or insufficient penalty risk assessment, employers are left exposed.
This blog will uncover the hidden risks of ACA compliance and explain why a comprehensive solution like Trusaic’s ACA Complete® offering can make all the difference.
The Problem with Most ACA Solutions
Many ACA compliance tools focus on solving one part of the compliance equation. Some are designed to assist with end-of-year filing, while others track monthly data, but very few can do both effectively. This fragmented approach leaves critical gaps in compliance processes, such as:
- Inaccurate or Incomplete Filings: Filing Forms 1094-C and 1095-C with incorrect or incomplete data can result in Letter 226J penalties from the IRS. For instance, the IRS recently began sending out Letter 226J penalty assessments for the 2022 tax year , reminding employers of how quickly errors can surface and lead to fines.
- Faulty Affordability Calculations: The ACA requires employers to ensure that health coverage is affordable for their full-time employees. Many systems lack the sophistication to validate affordability accurately across diverse employee populations, leading to unexpected penalty risks.
- Lack of Penalty Visibility: Without real-time tools that assess penalty risks throughout the year, employers may not realize they are at risk until it’s too late. This reactive approach can result in scrambling to correct errors and responding to IRS penalties after they’ve already been issued.
- Limited HIRS Data Integration: Payroll and benefits data often reside in separate systems. Without seamless integration, you are without a single source of truth — increasing the likelihood of compliance failures.
Trusaic’s ACA Complete software solution offers all of the above, and can alert you to potential penalty risks in a clean dashboard view.
Why These Risks Matter
The consequences of ACA compliance risks go beyond financial penalties. For ALEs, non-compliance can also lead to:
- Operational Disruptions: Correcting errors or responding to IRS penalty letters can take significant time and resources, diverting focus from other business priorities.
- Employee Dissatisfaction: If health coverage affordability issues aren’t addressed, employees may feel undervalued, leading to higher turnover rates.
- Reputational Damage: Failing to comply with ACA requirements can tarnish an employer’s reputation, potentially affecting its ability to attract top talent.
Employers need a solution that doesn’t just address the basics but provides end-to-end compliance capabilities to eliminate these risks.
What Makes Trusaic’s ACA Compliance Solution Different
At Trusaic, we understand that ACA compliance isn’t just about checking boxes. It’s about ensuring accuracy, mitigating risks, and providing peace of mind. That’s why our solution goes beyond the basics to address the hidden pitfalls that most systems overlook.
- Seamless Bi-Directional Integrations: Our platform integrates payroll and benefits data, ensuring that your records are always up to date. This eliminates the need for manual data entry and reduces the risk of errors stemming from data silos. With bi-directional integrations, your compliance data is synchronized in real time, providing a single source of truth.
- Advanced Data Validation: Many ACA solutions fail to validate data comprehensively, leading to inaccuracies that can result in penalties. Our advanced data validation processes catch errors before they become issues, ensuring that every filing is accurate and complete.
- Penalty Risk Assessment Tool: One of the standout features of our solution is the penalty risk assessment tool. This tool continuously monitors your compliance data to identify potential risks. By catching issues early, you can address them proactively, avoiding costly penalties and ensuring compliance year-round.
- Year-Round Compliance Tracking: Unlike many solutions that focus solely on end-of-year reporting, Trusaic’s ACA Compliance offering provides year-round tracking and monitoring. This ensures that your organization stays compliant every step of the way, reducing the stress and workload associated with last-minute filings.
The Business Case for a Comprehensive Solution
Investing in a comprehensive ACA compliance solution is not just about avoiding penalties; it’s about creating long-term operational efficiencies and safeguarding your organization’s reputation.
ACA compliance is too important to leave to chance or to rely on incomplete solutions. The hidden risks of inaccurate filings, affordability miscalculations, and penalty exposure can have serious consequences for your organization. That’s why you need a solution that addresses these challenges comprehensively and proactively.
Trusaic’s ACA Complete offering stands out by providing seamless integrations, advanced data validation, year-round tracking, and a penalty risk assessment tool that keeps you ahead of potential issues. Don’t wait until you receive a Letter 226J to realize the shortcomings of your current system. Schedule a demo today to see how our comprehensive solution eliminates risk and simplifies compliance.
Schedule a demo today to see how Trusaic’s ACA Compliance solution can protect your organization from hidden risks and with always-on software support and guidance.
Superior software, superior service — it’s what we do.
