Many aspects of Patient Protection and Affordable Care Act compliance can be a minefield for employers. Some of the challenges include tracking employee information to ensure correct offerings, complying with reporting requirements and avoiding missteps that could result in steep fines or lawsuits.
Savvy brokers can help them navigate these issues and provide value in the process. “Employers can respond to ACA-driven changes in employee behavior to hold down their costs,” writes Eric Helman for Employee Benefit Adviser. “Brokers and advisers would be well advised to initiate these efforts with their clients as they plan benefit changes for 2017 and beyond.”
Some ways brokers can help: providing solutions to make sure those being offered insurance qualify for it, and strategically focusing on things like exclusions.
“In their initial efforts at full-time equivalent management under the ACA’s definitions, most employers took a simplistic approach to the allowable measurement, administrative and waiting periods,” Helman writes. “Their aim was to minimize the law’s complexity and simplify compliance—not to reduce their costs. But cost increases are the single greatest catalyst for employers to modify their benefit strategy, so that will undoubtedly change.”
Employers should be thinking about spousal exclusions, Helman writes, because the ACA doesn’t mandate coverage for employee spouses. “One area of focus should be spousal employment verification, since failing to do this results in a less than 50 percent compliance rate,” he writes.
Brokers should also provide suggestions and solutions for dealing with paperwork associated with ACA, writes Rob Butler for BenefitsPro. “Employers who file ACA-related IRS documents late—or not at all—can be fined up to $3.2 million,” Butler writes. “While most employers won’t reach 100 percent of the maximum penalty, these unexpected costs can do serious damage to their bottom lines.”
ACA paperwork can also take up a huge amount of time, hurting company productivity. “With everything else on their plates, few employers have the resources to hire additional staff or spend hundreds of hours navigating complex ACA reporting requirements on their own,” he writes.
Taking the wrong approach can result in expensive legal action, writes Sheryl Smolkin for Employee Benefit Adviser. A group of employees who say their hours were reduced so Dave & Buster’s didn’t have to offer them health insurance are suing the restaurant chain. The lawsuit claims Dave & Buster’s violated the Employee Retirement Income Security Act of 1974 (ERISA). To avoid such issues, Smolkin recommends a comprehensive communications plan about benefits and any changes employers are making.
Butler believes brokers can be the key to streamlining ACA issues for employers, which in turn show the value brokers offer. “Employers are stuck between a rock (a wave of new reporting requirements) and a hard place (the lack of time and resources to properly meet these new requirements),” he writes. “However, adaptive brokers are in a unique position to equip their clients with the tools they need to relieve this new burden.” Tools such as Paylocity’s ACA Enhanced can help clients reduce manual effort, save time, and ensure compliance.