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2015 ACA Changes: Are you on Top of Your Game?
We're two months in - is your organization doing everything it can to stay compliant, and minimize costs, while still meeting your business demands?
Whether your company is large or small, it's essential to know how the latest Affordable Care Act (ACA) reforms will impact your company - and how your staffing partner can help you manage these changes.
Pay or Play?
Defining the Elements of the Employer Shared Responsibility Mandate
The most impactful element of the ACA's regulations, which went into effect January 1, 2015, is the Employer Shared Responsibility Mandate, often referred to as the "Pay or Play" mandate. This ACA regulation applies in 2015 to applicable large employers.
Applicable large employers are defined as those employers with at least fifty full-time employees, including full-time equivalent employees. Companies under common ownership are combined when determining the number of full-time employees for purposes of the mandate.
If you are an "applicable large employer," you are not required to offer health coverage to your employees, however:
- If you do not offer a significant portion of your full-time employees (70 percent this year, or 95 percent next year), and their dependent children, coverage that is both affordable and that provides a minimum level of coverage, you may be subject to a penalty if just one of your full-time employees purchases subsidized coverage through the public Health Insurance Marketplace (the Marketplace).
- The mandate essentially gives you the choice to offer coverage that meets federal requirements (play) or else you will be assessed one of two financial penalties (pay) for non-compliance.
Looking for simpler, more cost-effective ways to staff your large organization? We have the smart solutions you need. Give us a call.
While small employers, those with less than 50 full-time employees, are exempt from the Employer Shared Responsibility requirement this year, the mandate will be enforced on small employers beginning in 2016.
All employers, regardless of their size, that are considering whether or not it would be more cost-effective to terminate their health insurance coverage and pay a penalty should consider the following:
- Competitive benefit plans are still an important employee recruitment and retention tool.
- Depending on the size of the employer and its health insurance plan, applicable penalties for failing to offer coverage could financially exceed the cost of offering health coverage.
Minimize benefits expense and liability by using temporary staff intelligently. Call us to create the right strategy for your small business.
Cost-Containment Strategies within ACA Compliance
The ACA's employer mandate has significant cost implications for employers: Offer health benefit coverage to the majority of full-time employees, or face a costly penalty. Still, there are cost-efficient ways for employers to ensure compliance without compromising their staffing strategy or the quality of their benefit package:
Stay on Top of Your Game
Avoid ACA Penalties with Proper Compliance
Begin by confirming whether or not your organization is an applicable large employer and thus, required to comply with the Employer Shared Responsibility Mandate:
- Determine your Applicable Large Employer status - In general, an employer is considered an applicable large employer for a calendar year if it employed an average of at least 50 full-time employees and full-time equivalents on business days during the preceding calendar year.
- Determine your number of full-time employees - Calculate the number of employees within your organization who work an average of 30 hours per week or more, or 130 hours or more per month.
There are two approved methodologies for calculating full-time employees under the ACA: the monthly measurement period and the look-back measurement period
- The Monthly Measurement Period - provides a month-to-month analysis where full-time employees are identified based on their hours of service for each month. This methodology may cause difficulties for employers with varying hour employees whose full-time status may change month-to-month.
- The Look-Back Measurement Method - provides an optional safe harbor method allowing employers a greater level of flexibility and predictability for determining full-time status.
Calculating the total number of full-time employees within your organization who are eligible for health benefits is not just a task for your human resources team at the beginning of the benefit plan year. Full-time employee eligibility determinations now require ongoing monitoring throughout the year to help ensure proper compliance. The financial implications for non-compliance, however, could be significant. For this reason, proper compliance management should be an essential element of your cost-containment strategy.
Refine your Workforce Strategy
The ACA requires applicable large employers to offer health insurance benefits to full-time employees. Offering a market-competitive employee benefit package will continue to be an important tactic for employers in order to recruit and retain valuable talent. Employers can continue to offer health benefits that are both comprehensive and affordable with a smart workforce strategy:
- Monitor the Hours of Part-Time Employees - Ensure your part-time employees are not working more than 30 hours per week or 130 hours per month to avoid the cost of offering them health benefit coverage.
- Analyze Full-Time Positions for Part-Time Opportunities - Consider dividing full-time positions into multiple part-time opportunities to further minimize your number of full-time, benefit-eligible employees.
- Use Contingent Employees - Temporary and contract workers are employed by the staffing company, not your organization, which means you are not required to offer them health coverage. As a result, these individuals may be ideal for seasonal work, special projects that will only require staff for a finite period of time, and for high-turnover positions.
When things get busy, work with your staffing partner to determine if you really need to hire direct employees, or if temporary or contract staff may be a more cost-effective option.
Don't Go it Alone!
Optimize Compliance and Control Costs with Your Staffing Provider's Help
The ACA has revolutionized the way you must manage staffing and benefits -- and your staffing partner is here to help. Together, you can develop a smart strategy to:
- Obtain flexible access to talented people you need to get work done.
- Right-size your direct workforce and supplement it when needed with contingent staff who do not impact your benefits.
The bottom line? The right staffing strategy can control insurance costs, ensure proper compliance with federal regulations, provide flexible access to talent, and ensure your organization has the optimal staff to meet your business demands.