Leading Health Insurance Company Streamlines Fixed Asset Management with Paragon’s Expert and Meticulous Service

CLIENT SUCCESS STORY

Paragon’s expert recommendations and thorough Sage Fixed Assets implementation services empowered one of the U.S.’s largest health insurers to confidently leverage emerging tax write-offs and accelerated depreciation opportunities, both now and in the future.

Background

A leading health insurance company was grappling with the complexity of Federal and State tax depreciation calculations, bonus depreciation (Section 168k allowances), changes in tax laws, and new qualified leasehold improvements regulations. Since their fixed asset data was spread across multiple formats, understanding and managing their emerging tax write-off opportunities became a daunting and time-consuming task.

Challenge

Though the health insurer used spreadsheets to calculate Federal and State tax depreciation, its data was initially developed and updated using a mix of paper, PDF reports, other spreadsheets, and additional documentation methods. This made it extremely challenging for them to keep up with new asset additions and construction costs, and to identify and process asset disposals.

The issue intensified with the introduction of bonus depreciation (Section 168k allowances) in the U.S., changes in tax laws, and new qualified leasehold improvements regulations. The health insurer’s team knew they needed better data to take advantage of these opportunities before they slipped away.

Solution

Fortunately, the solution was easy to find. The health insurer engaged the fixed asset experts at Paragon, who proposed using a single, accurate, cost-effective software solution to improve and automate the insurer’s current (and error-prone) blend of manual and digital processes. The health insurer selected Sage Fixed Assets (SFA) to streamline their asset-management processes because it offered powerful, built-in wizards and more than 300,000 tax rules and regulations.

Before migrating the insurer’s data into a secure, cloud-hosted instance of Sage Fixed Assets, Paragon’s consultants worked with the insurer’s tax team to analyze their old procedures and files and painstakingly translate formulas and data for approximately 15,000 asset records. During this process, Paragon had to reconcile the insurer’s lengthy tax depreciation and asset records back to the original work orders and carefully analyze tax returns from prior years.

Results

The system Paragon put in place keeps the health insurance company’s tax records up to date, maintains compliance, and simplifies their tax reporting.

By implementing Sage Fixed Assets and integrating the insurer’s 15,000 assets into the cloud-hosted fixed asset software, the health insurance company now has all their tax reporting and audit compliance data organized in one place. Now, instead of sifting through opaque spreadsheet entries, the insurer’s fixed asset team can use Sage Fixed Assets to efficiently run all of their tax reports and automatically keep up with changes in tax rules that apply to each location.

Additionally, optimized property tax records from the insurer’s cost segregation studies were rolled into the ledger for future compliance, providing one source of record for all the insurer’s tax-related data.

“Our annual reconciliation process has gone from months down to just weeks thanks to Paragon,” said Ken R., former Vice President of Tax and Accounting at the health insurance company.