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What department is responsible for ACA?

Sunday, December 21, 2014
Health care benefits comprise a significant percentage of the budget for any business and require diligent bookkeeping across several areas of employee data. As a result, it’s easy to be unsure of which department should be responsible for ACA reporting. The reality is that multiple departments need to be consistent with each other and remain in communication to ensure that all ACA requirements are met.

Signed into law in March 2010, the Affordable Care Act (ACA) has revolutionized health reform and changed the way businesses are required to report health insurance coverage. Also known as the Patient Protection and Affordable Care Act, the ACA introduces a host of new mandates, regulations, penalties, and fines for businesses and individuals. But how should you delegate these new reporting requirements to the appropriate departments?

While the reporting requirements for tracking healthcare contributions have certainly gotten more complex since the introduction of the ACA, managing these requirements isn’t an impossible task. More than simply an annual enrollment process, the ACA requires employers who qualify as Applicable Large Employers (ALE) to offer Minimum Essential Coverage (MEC) to full-time employees and their dependents as part of the employer shared responsibility provision. ALEs must provide coverage reports to employees and the Internal Revenue Service (IRS) as part of this provision. Alternatively, an ALE member may choose to owe an employer shared responsibility payment to the IRS.

What department in an organization is responsible for ACA?

If you’re confused by the ACA and who should manage these federal government healthcare coverage requirements, you’re not alone. With the myriad of employee data involved in ensuring that your company is compliant with ACA, it’s feasible for several departments to be involved.

A 2015 study conducted by the National Small Business Association found that respondents spent an average of thirteen hours per month staying current with ACA regulations. Additionally, only 49 percent of respondents clearly understood how the ACA impacted their business. The survey found that 42 percent had limited understanding, while 9 percent had no understanding of the impacts of ACA.

Next, let’s look at some of the departments that are involved with ACA.

Benefits and Human Resources

The Benefits and Human Resources departments are typically two of the most involved in ensuring ACA compliance. These departments are vital in avoiding expensive penalties for failing to provide MEC to all full-time employees.

Overseeing recruiting, onboarding, and a business’s management of employees optimally positions HR to best track employee data necessary for ACA reporting. In addition, HR and Benefits should discuss health benefits with onboarding employees and manage administrative duties relating to health plans.

Because ACA regulations are continually evolving, these departments must maintain a current understanding of the reporting requirements and keep an open dialogue with the Legal department to offer the most up-to-date information to employees. In addition, fully understanding ACA to educate current employees, including those who manage ACA reporting, will make any HR department more successful and able to adapt practices to meet ACA requirements ahead of deadlines.


The Legal department should always be involved in reporting processes to the federal government; in this case, the IRS and the U.S. Department of Health. Therefore, the legal department will be your first and last word in compliance. They should also be a point of contact for all departments that deal with ACA.

According to healthcare.gov, there are many exemptions based on factors, such as location, that make the ACA reporting process more complicated. Additionally, some parts of the ACA apply only to small employers, but the distinction between these requirements and the requirements for large employers can be nebulous. However, the Legal department is responsible for maintaining up-to-date information about the ins and outs of deadlines, coverage, and requirements.


The Finance department is an essential component for adherence to ACA requirements and avoiding fines. Heavy penalties can be levied against businesses that don’t provide affordable coverage for full-time employees, but surveilling the complex costs of health insurance offered by the employer is a nuanced process. Therefore, the Finance department is instrumental in determining what is affordable and who the full-time employees are. Determining full-time status often falls under the perview of HR, so an open dialogue between departments will be crucial.

Fines for failure to meet the ACA mandates can be potentially ruinous for any small business. For example, ACA imposes a fine for employers that don’t offer coverage to at least 95% of full-time employees and eligible dependents. In addition, a separate fine will be levied if the coverage provided doesn’t provide “minimum value” or pay 60% of the cost of covered services. Finally, another penalty will apply if the coverage options are not affordable. According to healthcare.gov, affordability is quantified as a health plan that does not cost more than 9.61% of an employee’s household income.


Payroll is another one of the major players in ACA reporting. This department is responsible for tracking hours worked for all employees. These numbers will indicate full-time status and dictate affordability for health care. However, while this department handles these numbers directly, the interpretation and management of this data are usually handled by other departments. Therefore, open dialogue between HR and Finance is imperative for ensuring that deadlines are met.

How can ACA software help ensure compliance?

With all the moving parts of ACA compliance and the harsh penalties for non-compliance, it’s easy to see why many businesses choose to manage their ACA recordkeeping with software. The amount of inter-departmental communication required to avoid fines can be overwhelming. Software is a way to streamline this process and avoid expensive penalties. In addition, ACA software can help manage reporting deadlines, track money movement, and lessen the burden for individual departments involved with ACA reporting.

ACA compliance is everyone’s responsibility

In the end, no single department should manage the entirety of ACA reporting responsibilities. As new ACA guidelines emerge, interdepartmental communication will be vital in meeting requirements and navigating uncharted waters in health care reform.

Ready to work with a payment processor who can help you figure out which of your departments are responsible for ACA?

Heartland is here to help.

Heartland helps nearly 1,000,000 entrepreneurs make and move money, manage employees and engage customers with human-centered technology solutions that allow them to rise above the daily grind and lead their businesses into a brighter future. Learn more at heartland.us.