Look for business executives to consume large volumes of antacidbetween now and tax day. The first filing season under the employermandate of the Patient Protection and Affordable Care Act iscausing some indigestion.

“People really don’t understand PPACA all that well,” says BobMcNett, owner of The McNett Agency in Tulsa, Oklahoma. “Everybodyis still tentative, scared of making a mistake and getting finedfor something they did or something they forgot to do.”

Accountants also are scrambling to provide up-to-dateinformation.

“I’m in the industry, and I’m overwhelmed at times,” says KathyHettick, principal of Hettick Accounting & Tax LLC in Enumclaw,Washington. “For the first year, it’s extremely confusing; not somuch for the average person who works for a large employer butpeople who work for smaller companies.

“Take for example IRS form 1095-A, which shows how muchcompanies paid employees for insurance,” she continues. “I justread that some forms are incorrect and that some states arestill struggling to get information out.”

Brian Thompson, principal at Bailey & Thompson Tax &Accounting in Little Rock, Arkansas, sees the same problems. “Mostof our small business clients were in no way, shape or formeducated about this,” he says. “All of the information they get iscoming from us. When we tell them, it is a total surprise.”

This type of confusion is not simply anecdotal, asADP found in a recent survey.

“Frankly, we see a lot of apprehension, and we have quantifiedit,” says Christopher Ryan, vice president of strategic advisoryservices. “We did a survey not long ago. One of the key findings isthat roughly 50 percent of companies have concerns or trepidations,primarily focused on some of the key details around preparing tofile taxes, such as having all of the background information tofill out the forms. You have to make sure you have a defendabledata set in case you are audited or need to respond to an inquiryfrom a state exchange.”

Employers with more than 100 full-time workers are required tooffer healthinsurance and will face penalties if they do not cover at least70 percent of their eligible employees. In 2016, the threshold willincrease to 95 percent. The devil, of course, is in the details.Several experts addressed the biggest challenges they are seeingfrom their clients in this tax season.

Moving targets. "The ACA has been evolving asnew regulations are published," Ryan says. “The final 1094-C and1095-C forms have not been around for a very long period oftime.”

Reimbursement instead of coverage. “Especiallywith smaller businesses, compliance on the W-2s is where we havehad the biggest challenge,” Thompson says. “A lot of smallbusinesses don’t go to the trouble of getting a group policy forthree or four employees but simply reimburse employees for theirinsurance. They can no longer do that under the ACA. We had toeducate our clients that it was urgent to reclassify those paymentsas income to avoid massive penalties.”

Adequate data collection. “There are between 50and 175 different fields you may need to comply with,” Ryan says.“Make sure you have the data and that it is credible and auditable,in case there is an audit 18 months from now. Have a strategy onhow to save the data, and not just if the IRS calls you up. You mayreceive a notice from the state exchange to respond. Employersshould have the correct 1094-C and 1095-C data to sign off on. Askyourself, ‘If I were audited, how would I respond?’”

Data correlation. “Data requirements come frommany different record systems, such as time-management, payroll andbenefits systems,” Ryan says. “Often in HR departments, thisinformation may be manual or kept on separate systems. Absencemanagement often is kept on a spreadsheet. Date of hire, mostrecent date of hire, date of termination, ACA status and effectivedate for that status must be tracked. You also need to considersuch things as the FMLA, jury duty, veteran status, proof ofoffering insurance and proof that that employees actuallyenrolled.”

Variable hours. “The most complex challenge Iam seeing is with variable-hour employees,” McNett says. “Doinglook-back is really complicated for a typical business with 150 orso employees. Variable-rate employees may work 30 hours for acouple of weeks, then 15 hours and then 40. It’s really hard tokeep track of whether they qualify for insurance.”

Domino effect. “Something like a Department ofLabor inquiry about family medical leave could trigger an IRSaudit, and vice versa,” Ryan says. “Typically, employers are muchbetter off having an integrated system all operating together.”

Changing role of broker

Compliance can be daunting for a large business, let alone asmall or mid-sized one. However, a dependable brokercan be a big help.

McNett says though brokers have always had a consultative role,PPACA has largely increased it.

“We certainly have a more complex role now under the ACA,helping our clients comply with the law. I now have a blog, andmuch of the content is about the ACA. We receive a number of callsfrom clients who want to be sure they are doing things right.Brokers often can be the best resource, because they look at thewhole picture.”

Conscientious brokers are doing their homework to be able toassist their clients. "It takes us a lot of time to get up to speedourselves,” McNett says. “I try to learn through webinars andseminars put on by various sources, such as benefitsattorneys.”

He already is finding that this self-education is payingoff.

“I’ve heard from several clients who received advice from theiraccountants that I know is wrong,” McNett says. “One came back froma seminar and told a client with fewer than 25 employees that theyhad to comply, which is not correct."

Thompson agrees that brokers bring valuable expertise to thetable. “I think brokers could provide education to whomever theyare insuring,” he says. “If nothing else, clients can learn whatquestions they should be asking.”

The more wise counsel a business can obtain, the better. “Ithink brokers could be more helpful,” Hettick says. “Bringing thebroker and accountant together would be beneficial for anybusiness.”

Ryan couldn’t agree more.

“Historically, payroll and benefits people don't even talk toone another,” he says. “They need to sit down and talk. What I lookfor when I'm talking to a client is clear teamwork among HR,payroll and finance.”

Looking ahead

Although April 15 is on everyone’s mind, April 16 also is animportant date. That’s because the best time to plan for next yearis when this year is still fresh in people's minds.

“After we have done it once, we will be better prepared thesecond, third and fourth times, although regulations likely willkeep changing,” McNett says.

A timely meeting between an HR staff and insurance brokers, taxattorneys and other professionals can pay dividends. “A lot ofpeople got caught off-guard this year,” Thompson says. “We all knowthe rules now. You can prepare earlier for compliance, on a monthlyinstead of annual basis.”

Along with anxiety, PPACA can generate strong emotions. Onething everyone agrees on, however, is that it is unlikely theSupreme Court or Congress will toss out PPACA. “Work with the lawsthat are in place, not what you think may happen down the road,”Ryan says.

This means brokers and their clients need to remain on top oftheir game.

“PPACA has made our business a lot more complicated,” McNettsays. “As a benefits broker, if you want to stay in business, youneed to stay abreast of PPACA. It’s not going to go away.”