Demystifying the Affordable Care Act Compliance and Reporting For Business Owners

I had the opportunity to sit down with Adam Miller, Passport Software’s ACA Product Manager. In today’s interview, Adam demystifies the Affordable Care Act Compliance and Reporting For Business Owners by sharing insights that help take the guess work out with Affordable Care Act reporting, compliance and management software.

Markus: Thank you for sitting down with us Adam and helping us take the mystery out of this whole ACA Compliance and Reporting that Businesses all across America have to go through.

Adam: Thanks for having me Markus.

Markus: Absolutely. I know this whole Affordable Care Act, it’s a moving target, always changing and evolving and there’s so many nuances to it. So I really appreciate you helping shed some light on that for our readers today and help the business owners that really need some guidance in this regard. So tell us about your business and the types of clients that you’re helping.

Adam: Oh great, happy to be here. Passport has been in the Chicago area for over 30 years and we provide an ERP solution which is manufacturing, distribution and accounting packages including payroll, accounts payable, accounts receivable; over 20 modules and all to pick and choose from and all designed to work together. The end result is that you don’t have to enter the same information twice. Our customers we have from coast-to-coast and beyond and they typically need more than a silo modeled off-the-shelf product. They want to use technology to their advantage and these are basically companies that have outgrown QuickBooks.

Markus: Got it. So it was a natural fit with what you’re already doing with systems and streamlining data that you began working with the Affordable Care Act Management & Reporting Software.

Adam: Yeah and I specifically deal with our Affordable Care Act clients. The ACA is put some of these small to medium businesses in a really tough spot and it’s not just a burden of providing coverage to employees. These companies don’t have big HR departments with knowledge and all the ACA reporting and tracking requirements. So to help them, I think we’ve come up with the most comprehensive ACA software that I’m aware of. And it starts with identifying employees who are full-time and just as important the way they’re trending and remember that the IRS definition of full-time is 30 hours a week not the traditional 40. So we enable the user to keep track all the fluid information throughout the year, employees adding coverage, statuses changing, contributions going up or down. I just want to add that I have no first-hand knowledge of anyone’s insurance actually going down but our software would handle that hypothetical situation.

Markus: Oh that’s great. So tell me Adam what led you into this field, what got you started doing this?

Adam: Oddly enough after going to school for engineering I was in bar and restaurant management for years and I honestly loved dealing with the customers, giving people what they wanted, making them happy. But eventually the lifestyle, the late nights, the weekends got to me and I decided that I needed a change. So it wasn’t easy switching careers, I’m sure you can imagine. I didn’t meet all the search engine prerequisites and experience to just walk into a new career. But I got my foot in the door at Time Click who makes time clock software. And they’re known for their outstanding customer service which is right up my alley. And because of the relatively narrow scope of time clock software, it let me gradually improve my technical skills without trying to drink from a fire hose. So a year and a half after that, I transitioned to Time Clicks big brother Passport Software and began working with payroll. And this was before the Affordable Care Act was going into effect in 2015 but we recognized what was on the horizon for a lot of people and what a headache it could be. So Passport needed someone to become their ACA guru, figure out what the clients needed, figure out what the clients didn’t know they needed and be able to communicate with the programmers to put it all together. Plus I was naive enough about government bureaucracy to volunteer.

Markus: You didn’t know what you’re getting yourself into, did you?

Adam: No not exactly but as it turned out, my curious nature, my engineering nerd background and the customer service and communication skills made me a nice fit. And so I studied the ACA for months, mapped out all the requirements; info we had, info we needed and mapped out how to get those things to the user in a way that was easy to understand. And now it’s great, I get to talk with real-life entrepreneurs, business owners, business managers and when someone calls I know I have the answers for them. So it feels like the best part of a sales position except I don’t actually have to sell.

Markus: That’s awesome. I can hear your passion for this in your voice… you really do have a passion for this?

Adam: Absolutely! You know there’s something about when you’re prepared for something… you have knowledge that not a lot of people have and they need and you can get it to them. So I mean it’s satisfying, I liked it. I always like the customer service aspect and being able to use more of the technical and the nerdy side definitely stimulates my brain a little bit more.

Markus: Yeah, that’s great. Whenever you have a passion for something it speaks volumes and it really makes a difference when you’re dealing with and helping create solutions for businesses and clients and customers that they’re really searching for that. So that’s great, I appreciate you sharing that. You know I love to ask you, I know there’s so many parts and moving pieces to the ACA – this whole Affordable Care Act; you know what would you say is one of the most common obstacles preventing your clients from dealing with it or being able to really embrace it or achieve the outcome that they’re shooting for?

Adam: I think, like with so many things, it’s just knowledge. The Affordable Care Act is really a different animal. HR professionals weren’t trained for this, accountants, lawyers; the ACA doesn’t fit neatly into any of those areas and it’s not always intuitive.

Markus: So being that it is kind of convoluted which, as we know with the government, things can be that way. How do you solve that? How do you help them to navigate that piece of the puzzle?

Adam: Well it starts, I guess one of the biggest misconceptions is that the ACA reporting is an accounting process when it’s actually closer to a record-keeping process. Yes there are accounting aspects of it and the responsibility typically falls in the lap of an accountant or an HR administrator. But this is about having very specific legal knowledge, applying it to a staff with frequently changing the circumstances and recording all those details on a monthly basis. So it’s not just offering Fred insurance in January and checking a box on a government form the next year. You really have to stay ahead of the process, make sure you’re making those offers on time, tracking the information accurately, make sure you’re in compliance with all the requirements.

Markus: Absolutely it makes a lot of sense. So what would you say is one of the biggest pitfalls that businesses may not be aware of?

Adam: They’re not aware of probably the common ownership issue and that’s where the law says if you own multiple businesses and an employee works for more than one, their hours must be combined for the purposes of identifying them as a full-time or part-time employee. And this is done to prevent splitting large companies into smaller ones or having Sally work 16 hours a week at one company and 16 at another. A common ownership rules make it clear that this employee is considered full-time by the IRS. So you can’t get around it, they’ve closed up all those loopholes.

Markus:  Do you have an example of how businesses deal with common ownership. It sounds like you had to deal with this issue multiple times?

Adam: Absolutely. We have a lot of people who own multiple businesses but one of the most common we see is is clients who own franchise restaurants. And many times an individual or group will own five to twenty of them in a region and some employees are scheduled among two or three franchises in the group. So monitoring the turnover and status of variable hour employees can be a challenge to begin with. And it’s compounded in this industry where employees trade shifts and you have turnover and everything else. So this is the point where counting on separate management staffs and using homemade spreadsheets or internal solutions to identify who just became full-time and needs an offer of coverage within thirty days simply doesn’t cut it. The IRS penalties are just too severe to let it slip through the cracks, so you need something that can talk to each other and consolidate everything. So our software has a level of integration that consolidates an employee’s hours across multiple companies and is also intelligent enough to handle the complex reporting rules affected by common ownership. There’s actually a bizarre case for reporting for these employees where the IRS wants you to submit separate 1095-c form from each company. But for each month you only use the actual codes for the location where they worked the most that month and all other locations essentially treat the employee is not employed for that month. And you repeat this for all 12 months of the year going back and forth depending where they spend most of their time. So doing this by hand would be just awful.

Markus: Wow, that’s a paperwork nightmare.

Adam: And these business are playing hopscotch with it because they have to look every month to see where they work most of their hours and then you report for them from that company but not the others but you have to still have to return a 1095-c for the others but since they didn’t work there for that month. So it makes you wonder what our lawmakers are doing sometimes.

Markus: It definitely makes you wonder. So really sounds like that not only does Passport Software cover all these other aspects of business software and automation and kind of keeping the data flowing and not duplicating effort and data entry and all stuff. But you’ve now taken that one step further with the ACA and created a solution that navigates all the craziness and the pitfalls. And like you just shared in that example, where a business has to bounce around between different forms and different locations based on number of hours, talk about moving parts and moving variables that’s crazy. And yet, you’ve put it all together in a package that manages it for them so that they don’t have to have this crazy nightmare looming over them every single month to try to make sure that they don’t get huge penalties and slapped by the IRS and God knows what other things they have to cooked up if they don’t do it the right way.

Adam: Yes absolutely. And I think you’re aware that I just did an article on the part two codes for the 1095-c in talking about the multi location, common ownership consolidation that’s might be the most confusing but it doesn’t affect everybody, the part two stuff affects everybody. So you definitely want to familiarize yourself or be aware of what all those codes and what those even the contribution amount which sounds like a straightforward thing but in practice it really is a little misleading. So you want to make sure you’re prepared to do that.

Markus: For our readers that may not be familiar with Part 2, can you shed a little light on that since you just did an article on that?

Adam: Yeah, well part two is the real meat of the 1095-c form. So part one is information that’s pretty standard, you shouldn’t have any problem with that; that’s an employee’s name, address, social security number and all the basic stuff. Now part two is the three, there are three lines; line 14 asks for information about the offer; essentially did you offer these employee insurance, was it available to their spouse and dependents and they have different cases for you know spouse but not dependents – dependent but not spouse; all three, none and all that; was it affordable, did you not offer it at all. Then line 15 is the contribution amount but that’s a little bit tricky. They’re asking for the employee’s share of employee only coverage that they could have gotten. So it’s not what the employee actually enrolled in, it’s not the full amount of the monthly premium, it’s not just because you offered coverage to their employee and you just said that the line above. They’re no longer concerned with the fact that you just offered coverage to their spouse and six dependents. They want to know what it would have cost them for the employee only. So that can be a little misleading and a real stumbling block for a lot of people. And then line 16, the final line in part two asks you to basically describe what happened as a result of the line 14 action of the offer or non offer, non qualifying offer. So you would put down if you offered, or they weren’t offered insurance, you know if you don’t put anything or you know that means you’re probably going to get a penalty. But you could have a valid reason like they’re part-time or they’re in a measurement period, what they call limited non assessment period because they don’t want to make the language clear for anybody. Or code 2C if they enrolled or what they call safe harbors; meaning you’re insuring, you’re acknowledging that the offer was considered affordable but that the employee did not enroll. But the language can be quite confusing.

Markus: It sounds like it, I’m confused right now.

Adam: I apologize if I went on a little bit of a rant there.

Markus: No, I’m just kidding with you a little bit. It’s the government that’s confusing us with all this rules and regulations and do this but don’t do that – do this but it may not be that, etc. etc. We need more experts in the field educating business owners like yourself to help shed light on this because nobody wants to get that nasty letter in the mail or phone call or fine or whatever the things they’re doing these days, it’s just crazy.

Adam: Absolutely and for many businesses the hard part is the reporting. They’re already offering insurance or maybe they’ll start if they weren’t before. But the difficult part is the actual reporting, it can be such a burden to do it correctly and to do it at all. Whether you’re filing paper forms or if you have over 250 employees you must file electronically. So just the act of recording can be worse than the actual providing insurance coverage to your employees.

Markus: Yeah, I can see that definitely. So what would be your best advice to our readers who are considering dealing with this or having an issue or realizing that maybe they might not be doing it right or just looking for some help?

Adam: Well if you’re going to tackle it yourself, know what you’re in for. Educate yourself and the sooner the better because by reporting season it may be too late to avoid those penalties. You know once someone is do an offer of coverage, you can’t go back and make it retroactive, you’ve already missed it. If you’ve missed it, you’re gonna get fined for that. So educate yourself and I’m not talking about the actual 2,000 page law. Start by just Googling the 1095-c instructions and go right to the source you’ll see a link to the IRS, you can download that PDF, it’s a 19 page manifesto from the IRS. So grab a double from Starbucks because it reads like you would expect anything from the IRS to read. But if you’re able to get through it at least you’ll have an idea of what’s ahead of you.

Markus: Great advice. And if someone doesn’t want to tackle it themselves, what’s the first thing they should do if they’re ready to reach out for some help?

Adam: Well if you do get overwhelmed, call a professional… an ACA specialist. Not an accountant, not a shrink but you may need one of them too. But the ACA expert will know the questions to ask and the best course to take. So like I just mentioned, if you have a hundred employees, every one of them full-time and every one of them offered affordable coverage that’s a straightforward case. And even if you’re completing all the 1095c’s by hand, though it’s time-consuming, it’s not really difficult. When you have to make full-time, part-time evaluations that can exponentially complicate your task and increase your risk of penalty if you miss one of those full-time employees. And then when you get over 250 forms to file, you’re required to submit electronically and you categorically need some specialized software or service to get that done. There’s no way you can do it in house because it’s not like a web form or anything. It’s an XML document that you have to upload to the IRS and there’s no way that 99% of companies out there can prepare this on their own. So be aware that most of these options still lack the tracking and management which a lot of businesses need throughout the year.  But at least that will get you a general approach.

Markus: Perfect. It’s exactly what I was looking for, thank you. So how can our readers find out more about how they can go about doing this, how they can reach out for help if they find what you’ve shared with them is helpful and they want to consider looking at your software to simplify this; what’s the first thing they should do?

Adam: So if you find out if you’ve prepared to handle this in-house and on top of what we’ve discussed and we haven’t even talked about things like the social security number validation or filing corrections. And I didn’t get into our full service option where we administer everything to you but we do have the software as we’ve talked about already. So without a doubt the best option is talking to a real person. So the number here is 847-729-7900, ask for me and I can help you figure out your best option. If you are ready to take the leap and have pricing or sales type questions, we’ll connect you to Marty, and if you really hit it off, she’ll send you pics of her grandson. And if you don’t have a phone, I do periodic Passport webinars which are always free or you can email me at And if human contact of any sort is off the table, you’ll be happy to know we have a YouTube channel with dozens of helpful videos.

Markus: That’s great. So it sounds like you have a lot of resources that our readers can tap into to really educate themselves and feel comfortable knowing that they’re moving in the right direction as well as having that expert assistance to be able to go out there and make that happen.

Adam: Yes. If they want to call me I’m happy to talk with them and put them on the right track. I’ll ask a few questions about their business making sure that they know what they’re going to need to do.

Markus: That’s fantastic. Well I appreciate you you spending the time with us today. You really shared a lot of golden nuggets and a lot of very detailed and useful information that I think can help a lot of our business owners and readers out there that are having these challenges and wondering now am I doing this right, do I need to be you know doing this differently and giving them some rock-solid solutions to help them do that. So I really appreciate you being with us today Adam and I appreciate it and I’m sure we’ll be talking again soon.

Adam: Markus it was my pleasure, thanks for having me. And yeah I really hope people learned a little bit and are at least a little less worried about what’s ahead of them.

About Adam Miller and Pass Port Software Inc:

Not only is Adam an expert in ACA (Affordable Care Act) Reporting, He has a background in engineering, the service industry, and print, which makes him a technically proficient and patient/friendly communicator for ACA Customer Support as well as running the ACA reporting services.

In his spare time, he enjoys building and racing motorcycles (with a particular love of Italian bikes), exploring the regional national parks and forests, and is a nationally accomplished bridge player. He’s been a part of the Passport Software team since 2014.

Passport Software, Inc. is located at 181 Waukegan Rd #200, Northfield, IL 60093. To Learn more about the their leading edge accounting, ACA Management and business software solutions for small to medium sized businesses, visit them online at or call at 847-729-7900 to talk to Adam.

Passport Software, Inc.
Founded in 1983, Passport Software, Inc. is a leading provider of accounting and business software solutions for small to medium sized businesses. Several thousand installations are supported by our channel of North American and international Partner professionals

Markus Loving is a Best Selling Author, National Speaker, long a time entrepreneur and a host on Business Innovators Radio with his show The Inside Track and contributor to Business Innovators Magazine and Small Business Trendsetters where he covers leaders and trendsetters in Business. As the founder of, over the last 10 years, Markus has been empowering business owners across the country to Dominate Their Market Online with Reputation Marketing, Local Search, and Authority Presence Marketing. Markus gets great joy in Demystifying the Internet for his clients as he educates them with the most cutting edge and innovative strategies, tools and processes.