Only 10 percent of employers have implemented an ACA reporting solution

In January 2016, employers will be required to report to the IRS on their compliance with the Patient Protection and Affordable Care Act’s (ACA) employer mandate. But as of the first quarter 2015, only 10 percent of employers noted that they have already implemented an in-house or outsourced solution to comply with these reporting requirements. And another 16 percent said that they have not yet even considered a solution, or do not know what solutions they should consider.

Background. ACA Sec. 6055 requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs, and other entities that provide minimum essential coverage to file annual returns reporting information for each individual for whom such coverage is provided. ACA Sec. 6056 requires applicable large employers—generally employers with at least 50 full-time employees, including full-time equivalent employees—to file information returns reporting the terms and conditions of the health care coverage, if any, provided to full-time employees.

In-house vs. outsourcing. The survey of 480 employers by PwC and Equifax Workforce Solutions also found that 26 percent of small employers (those with less than 1,000 employees) are still undecided regarding whether they will implement a solution in-house or an outsourced solution to facilitate reporting. In addition, 37 percent of large employers (those with 5,000 or more employees) reported that they are currently in discussions with outsourced vendors, and 12 percent have not yet considered any solutions or do not know. Twenty-seven percent of mid-sized employers (those with 1,000 to 5,000 employees) reported that they are planning to implement an in-house solution and the same percentage reported that they are considering an outsourced solution, while 15 percent have not yet considered any solutions or do not know.

If outsourcing, 48 percent of smaller employers plan to use their payroll vendor, and 5 percent of large employers plan to use a dedicated ACA compliance vendor. Eighteen percent of mid-sized employers are still in the process of determining their outsourcer. Of the survey respondents that have more than 30 percent variable hour/part-time employees, 44 percent intend to use a dedicated ACA compliance vendor to meet the ACA information reporting requirements.

Other findings. PwC and Equifax also found the following:

  • 65 percent of employers are concerned about data quality.
  • 46 percent are undecided how they are going to deliver the necessary forms to the IRS, while 30 percent plan to do this in-house.
  • 82 percent indicated that the human resource/benefits department is leading the company’s efforts toward complying with the ACA reporting requirements.

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