The recently released ADP Midsized Business Owners Study for 2015 looks at how that market segment is responding to regulatory and compliance challenges, notably obligations under the Affordable Care Act.

“Complying with government regulations is a tough job, even for large organizations with the best resources,” the report says. “For midsized businesses with limited resources, facing compliance fueled by increasing layers of regulatory complexity can have a direct impact on profitability.”The annual study by the payroll services and human resources management provider surveyed more than 700 business owners and executives at U.S. companies with 50 to 999 employees.

 Regulatory concerns appear to be increasing. Just under half of midsized business owners and executives worry most about managing the layers of government regulations. In 2014, only 30 percent ranked managing the layers of government regulations as a top concern, compared to 41 percent this year.

While the vast majority of midsized company executives’ report being confident in their compliance with payroll tax laws and other workforce regulations, ”there is a clear disconnect” as more than one-third experienced unintended expenses as a result of non-compliance, the report says. Nearly half did not know how many fines they incurred or how much they have cost their organizations.

Roughly one-third of respondents expressed concern with compliance when it comes to wage and hour regulations, a marked increase from previous surveys.

In a sign that midsized business owners and executives may be accepting the  reality of the ACA, concern for the legislation and the cost of health coverage remained consistent since last year. Three out of five midsized business owners and executives expressed confidence their companies will manage ACA compliance properly; a majority is confident their organization will be compliant with all new ACA regulations. However, less than half feel they are extremely or very prepared to effectively manage the complexities of eligibility and affordability requirements and only about half expressed confidence in their payroll, HR and benefits systems working together to produce accurate data for ACA reporting.

Also, only one-quarter of respondents are “extremely confident” that their organizations understand all of the new ACA regulations; only slightly more than one-third are extremely confident their organizations will be compliant.