Employers nationwide were well aware that navigating the maze of Affordable Care Act (ACA) reporting requirements would be a challenge.

Following a survey conducted by PricewaterhouseCoopers (PwC) and Equifax Workforce Solutions during the first quarter of 2015, it appears they had no idea just how challenging.

Overall, the survey results show that the new ACA reporting requirements have employers a bit confused, with many not yet deciding how they will comply. For example, the survey, which gathered responses from 480 employers of all sizes in 36 different industries across the U.S., found only 10% reported having an in-house or outsourced solution in place.

With the first reporting for the entire 2015 year due to the IRS on Jan. 1, 2016, that could be a problem.

According to Mike Thompson, a principal and NY-metro healthcare practice leader in the PwC Human Resource Services group, ACA reporting actually is a tax requirement. However, the real burden is falling elsewhere in corporations–four out of five (82%) employers are managing ACA reporting through HR departments.  Also, data and IT are critical, with two out of three companies (65%) reporting concerns about data quality and 30% expressing concerns about managing the security of this sensitive data.

“As the study reveals, ACA reporting has caught many employers off guard,” Thompson explains. “While most were aware of a need, they generally did not appreciate the degree of complexity and effort that would be required to complete it.”

The data quality issue was especially perplexing because ACA Reporting requires data from multiple sources - HR systems, payroll, benefits, leave of absence and potentially others. Some of the data elements can be uneven in their availability (e.g. dependent social security number), while other data elements may exist but have never been used in this manner (for a tax filing), so their integrity may be in question, Thompson says.

Other leading concerns of ACA reporting varied. For instance, over half of employers were concerned about understanding their different reporting options. Large employers, in particular, were concerned with responding to notices from the public exchange.  The administrative expense of this reporting was also cited by all employers. 

Where outside vendors are being utilized, Thompson says, small employers are more inclined to use their payroll vendor, while larger employers are more inclined to utilize a dedicated ACA compliance vendor or their benefits administrator.  Mid-sized employers are more open to multiple sources and least likely to have decided at this point. 

“Most employers feel that ACA reporting should be straightforward for the majority of their full-time workers,” Thompson notes. “The greatest complexity tends to relate to their variable workforce and some of their outliers such as contract workers, interns, multi-employer plans, etc.”

He adds that the existence of multiple payroll or HRIS systems, often arising from earlier acquisitions, complicate ACA reporting.

“The more complexity, the more likely employers will look to a specialty vendor to support them,” he says.

With ACA reporting right around the corner, employers need to make "good faith" efforts to comply or risk penalties. Just as importantly, employees also will need these new tax forms to file their own taxes and employers will want to be prepared to avoid or mitigate potentially unprecedented confusion and costs.

“These are new processes even for their existing vendors, and even with outside vendors there will be a need for internal efforts to coordinate and implement,” Thompson says. “For those who have not begun, starting soon is essential.”