The Affordable Care Act and Your Budget

Good findings of a recent survey conducted by payroll service provider Paychex, many small businesses are still not prepared for the changes imposed by the Affordable Care Act (ACA). In fact, only a little over half of small businesses understand and are prepared for the changes required by ACA. The rest of these companies either do not understand it at all or only partially understand it, and are not prepared to comply with its complex rules and regulations. It is likely that many larger companies as well are confused or unsure about compliance issues associated with this Act.

This implies that budget activities (particularly additional potential costs and tax credits) that are supposed to reflect these major changes to our healthcare system are probably not performed. Actual financial impact resulting from the changes will not have corresponding budget components and certain variances are likely to develop.

The Affordable Care Act example is a good reminder of the real challenge in incorporating changes to any budget or forecast, which is, being able to quickly and with little effort manage modifications to the process and its details. Unless the budgeting system is open to modifications without having to perform programming or enter an array of new formulas and links to other worksheets or system modules, these modifications, assuming the company understands the changes to its required compliance, are unlikely to be made.