The portion of the Affordable Care Act defining a full-time employee is about a page and a half of double-spaced material.
The regulations written by the Internal Revenue Service, the U.S. Department of Treasury and other federal agencies are about 56 pages of single-spaced material.
The rules are not even the final rules. Those who wrote the rules, as well as Congress and the Obama administration, continue to tweak them, especially the timing for when certain provisions of the act must be met.
The result is confusion among employers and employees over what is required. Both can face financial penalties for not complying.
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Some are hoping that Congress – or the courts – will change the Affordable Care Act or do away with it altogether. The U.S. Supreme Court is expected to rule by midsummer on the latest court challenge on whether federal subsidies to help people buy health care insurance are legal.
Stephen Schram of Rock Hill has studied the Affordable Care Act, not as an accountant, a health care insurance broker or a human resources professional.
Schram has studied the act through the eyes of a computer programmer, a self-taught computer programmer at that.
The act, he said, is “elegant and clear.”
“It is written in a confusing way, but the more you study it, you see how the twists and turns come together,” he said
Schram, his company’s chief technology officer, and his business partners are betting the confusion over the Affordable Care Act will mean big business for their “Trax” software.
Trax is a Turbo tax-like program that not only helps determine who is or isn’t a full-time employee but also tracks employee hours needed for ACA compliance, completes necessary federal forms and provides a dashboard that measures the company’s risk, calculating both the cost of compliance and noncompliance.
“It’s a tool to keep you on the right path, take the guess work out of the Affordable Care Act,” said Jonathan Ferguson, Trax’s chief sales and marketing officer.
Schram boasts that “nobody is better than us” when it comes to Affordable Care Act compliance software. When you Google Affordable Care Act compliance, Trax is one of the top three hits. His Web data shows he’s getting 2,200 hits a month, and each viewer is averaging just more than two minutes at the site, reading all six pages of content. More than 80 percent of his viewers are first-timers.
Home base for Trax’s ACA compliance software is a second-floor office on Main Street in Rock Hill.
Schram, raised in Illinois, has called Rock Hill home for many years, initially coming to work for United American Video, which made and distributed products such as videos, compact discs and CD-ROMs.
Former business partner Rich Boehling helped turn Schram’s attention to the Affordable Care Act. Boehling runs a company that provides workers to firms. He wanted a program that would track his workers’ hours, keeping him Affordable Care Act-compliant and his costs competitive.
So Schram and fellow programmer Jimmy Schwietert spent nine months working in the attic office of Schram’s home to write Boehling a program.
When they were done, they realized they might have something others needed. They released an “MVP,” or minimally viable product, version of the program and asked early users for their feedback.
While Schram and Boehling realized they had a good product, they acknowledged they didn’t know how to market it. That’s when Ferguson, who had once been Schram’s boss when he tried to sell insurance, came aboard.
Ferguson, with many years of experience in the benefits industry, helped Trax find its target market: health insurance advisers. These advisers are usually one of three people businesses consult when they have Affordable Care Act questions. The others are their accountants – after all, having health care is a tax – and their payroll company, because compliance is all about hours. The act defines a full-time employee as someone who works, or averages, 30 hours a week.
Health insurance advisers have become their informal sales force, Schram said.
Validation that they are on the right track, Schram said, comes in several ways. Their sales force has yet to make a “cold call,” instead relying on word-of-mouth referrals or their presentations at various association trade shows. So far they have several hundred clients, but if the Supreme Court upholds ACA this summer, the number could drastically increase. The projected sweet spot for Trax is businesses with 50 to 10,000 employees, Schram said.
Another sign they are on the right track, Schram said, is the interest from other companies wanting to buy them or align with them.
And there are the calls from people Schram and his partners didn’t even see as possible clients a few months ago. Companies in the merger and acquisition field are calling, Schram said, wanting to know if they have software that will determine a company’s Affordable Care Act liabilities.
While they wait for the Supreme Court’s decision, Schram trains his work force, which is the backbone of Trax. When clients call with questions about the Affordable Care Act, Schram wants them to get the right answer from the person who oversees their account. Trax, which started with four people, now employs 16 and continues to hire.
They also continue to improve the software to meet the latest rules.
And they wait, unsure if they are prepared. Schram candidly admits Trax is strategically timed and has a target focus, but it didn’t happen by design. It just happened.
“We have the expertise, but how do I prepare for the number of calls we will get?” Schram asks. “The challenge will be not to drop the ball.”
Don Worthington • 803-329-4066 • email@example.com
Want to know more?
Go to trax-aca.com