Affordable Care Act and Payroll


Due to recent actions by the Federal Government, human resources departments must now also track compliance at both the employee and company level with the Affordable Care Act (ACA).
The Payroll module in accounting software facilitates periodic payments to employees, keep track of withholding obligations and taxes and prepare W2s. A side benefit is that hours entered
into an employee’s time ticket may also be able to update a job cost database or vice versa. In effect, killing two birds with one stone.

There is also the human resources side of employee relations. This portion of the database keeps track of incidentals about an employee as well as tracking pay raises, anniversaries, sick and vacation time, etc.
ACA tracking issues are:

1) Is the employee considered eligible for a low-cost health insurance policy?
2) Does the employee have his or her insurance through the company or through a partner’s or spouse’s policy?
3) Has the employee rejected owning insurance and is willing to pay the penalty?
4) Is the company at risk for paying penalties for non-compliance?

Most payroll or even human resource modules in accounting systems do not currently address these issues.  The Federal Government may eventually make it mandatory for businesses to generate specially designed forms and submit quarterly or annually just as they do 941s and W-3s. When this comes to a head, expect that accounting systems will provide this as standard feature. Until then, expect to maintain customized, ancillary data in order to tabulate the required reports.

You are looking for someone who understands your business and will help you navigate your needs. It’s your money and business on the line. Give us a call at (773)502-5771 to get you on the right track.

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