ACA Compliance Starts with Methodical Risk Assessment

ACA Compliance Starts with Methodical Risk Assessment

 

 

The best way to ensure Affordable Care Act compliance is to begin with a comprehensive risk assessment

The Washington D.C. policy experts perceive the Patient Protection and Affordable Care Act (ACA) as too complicated to understand. For ACA, compliance won’t be easy and auditing the readiness for compliance is not easy either. However, the auditors are optimistic that once you get an idea of the organization’s risk profile about the act, it is simpler to focus on other risks that pose a bigger threat.

According to Annette Schandl, who is the senior vice president of audit at CHAN Healthcare, management has to put in place specialists to implement the ACA. Once the implementation is completed, then the process is audited. According to her, internal audit must be brought into place as the policies and procedures are developed to ensure the right controls are developed too.

 

The Biggest Challenge

The Biggest Challenge

Many stakeholders are having problems and organizations are confused because the process appears to be too complicated. For instance, the human resource professionals are having their fair share of the problems because more than half of the human resources and payroll consultant are unprepared to comply with ACA’s regulatory requirement requirements. One of the compliance problems is related to penalties, exchange notices, and the reporting required to the U.S. Internal Revenue Service. Internal audit need to help in identify and order the risks and assessment of the compliance.

In the midst of these confusions, many large companies are using various benefits strategies that end up costing more to employees in the wake of exercise tax on high-value health plans which are projected to be effective by 2018. Other companies have opted to limit the hours of some employees to avoid the coverage mandate.

Other issues that need to be addressed include how to communicate to employees, special transition rules, auditing of certain health plans by the U.S. Department of Labor, addiction of equity Act and Mental Health Parity. Even if these are areas new to the internal auditors, what need to be performed by the auditors in response is not new. The bottom line is that compliance with ACA would be difficult, but auditors should first perform tasks they are familiar with without being daunted by what they are unfamiliar with.

 

Risk Assessments

Begin with Risk Assessments

This was the trickiest part of compliance for Belluvue, Wash-based Nordstorm. According to Dominique Vincenti, vice president, internal audit and financial controls say that the problems were self-inflicted since the company maintains benefits, HR, and Tax department. Part of the problem was because the HR department managed some of the taxes for the enterprise instead of the tax department.

In this kind of circumstance, each department thinks the other is taking care of it. A detailed risk assessment conducted by her to the ACA suggested that roles and responsibilities were not clearly stated in terms of tax implications of the ACA. Because of the detailed risk assessment, the team was able to agree on the roles, and now the problems facing the ACA are mostly complete.

The Value of Comprehensive Risk Assessment

This was seconded by Sharon Gipson, the vice president and corporate audit at blue Cross Blue Shield of Michigan. She says that a smart approach to ACA begins with comprehensive risk assessment. Decisions have to be made about the pieces of ACA applicable to an organization to ensure plans are made on what to focus.

She recommends that organizations should primarily involve not only the internal processes but also the vendors and partners to ensure a much compliance risk assessment into the organization. The strategy is to address the higher risk areas first through the understanding of the portions of the ACA and how they have been implemented within the organization.

 

Business as usual

Business as usual

The role of the internal auditor is to ensure employer readiness and compliance according to Gwendolyn Skillern, the general auditor and senior vice president of CareFirstBlueShield in Owings Mills, Md. She says that auditors should start with what they know first. For instance, her company began by dividing the compliance departments into five tracks. The internal auditor was embedded into one of them to ensure the compliance strategies were understood well and efficiently direct the audit activity. She says that the auditors cannot work in a vacuum but need to work hand in hand with the business to mitigate the risk facing the company.

Meeting Requirements

Several challenges are experienced when internal auditors try to look at the control processes and procedures that are implemented on the full-time employees and attempting to track the record keeping requirements of the ACA. According to ACA, a full-time employee works 30 or more hours per week. The internal audit department has to make it follows the ACA requirements.

A Smart Approach

The best approach to prepare for the ACA is to make sure the auditing of the compliance is a routine process. For instance, it is important to perform a risk assessment and build an audit calendar to help the business comply with ACA regulations.

 

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