Making sure you're really ready: compliance + costs.

• Author: Dewitt, Charlie

The clock is ticking. Even after the latest extension, the January 1, 2015, deadline for the Affordable Care Act is approaching fast, and state and local governments are looking for ways to keep costs low while providing continuity of services. Like any other employer, governments have to implement the ACAs provisions or face increased costs and potential penalties for non-compliance. (See "ACA Action Steps for 2014: Another Look at the ACAs Shared Responsibility Provisions" in this issue of Government Finance Review for more details.)

An additional concern is that many state and local government organizations erroneously believe that they are ready for the ACA's comprehensive reporting requirements. However, jurisdictions that have manual, paper-based time-tracking processes--and many still do--could be setting themselves up for bigger challenges down the road.

The good news is that organizations still have time to get on track and better prepare themselves for ACA compliance. Developing and implementing effective strategies, while avoiding the challenges associated with manual processes, will also help governments improve their ability to meet the needs of their constituents and communities.

THINK AGAIN

The Affordable Care Act requires organizations with more than 50 full-time equivalent employees to provide affordable health-care insurance to any employee who works 30 or more hours per week or 130 hours per month, or to pay associated fines. Many state and local governments indicate that they are ready to comply with the legislation, but research shows that these organizations may not be as "ready" as they think. According to a July 2013 survey, 89 percent of respondents reported that their current tracking methods showed their employees' part-time or full-time status, as required by the ACA. Similarly, 78 percent said that their systems could effectively report ACA compliance information to the IRS now. (1)

So far, so good. But as these same organizations take a closer look at the methods used to collect and calculate ACA compliance data, the outlook becomes a little less rosy. For example, 77 percent of respondents indicated that they currently use, or plan to use, paper timecards or spreadsheets as the principal tools for calculating their standard measurement periods. Further, 51 percent of respondents reported that they use manual time and attendance systems to track employees' hours and leave time. (2)

Since this research was conducted before the December 2013 ACA deadline extension, chances are good that many state and local governments are still relying on the same positions and processes they reported earlier in the year. In doing so, these organizations are building long-term strategies upon potentially flawed data, or at...