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Recently, the Treasury Department issued employers with 50 to 99 full-time equivalent employees a one-year reprieve on part of the Affordable Care Act (ACA). As long as they have not shed employees, nor cut an employee’s hours to get their firm into that under-100-worker category, companies of this size now have until January 1, 2016 to “play or pay.”
Those who employ fewer than 50 have no coverage mandate, and never did. Organizations larger than 99 must comply by January 1, 2015, but for the first year they will only have to offer coverage to 70 percent of their full-time employees, rather than 95 percent, as was originally written.
Frustrated and confused yet?
Among business owners, aggravation has been a common reaction to the Affordable Care Act. This legislation has been uniquely difficult to plan for, and respond to.
The result is a large segment of private business owners who have so far left the issue mostly unaddressed within their organizations. Your business can do better. Don’t let the ACA be something that “happened to you.” You can make a smart, strategic plan to manage the post-ACA environment. Here’s how.
Look at this from a new angle
When addressing healthcare coverage for your workforce, be sure you are starting from the right place. Avoid posing, “How should I react to the ACA?” Instead ask “What do I want to accomplish by offering employee benefits?”
This question frees you to prioritize your business objectives. It allows you to take a step back and put the ACA into perspective, seeing healthcare coverage as one piece of your overall compensation and benefits offering. Your approach must take the ACA into account, but should be propelled by your unique business drivers, your organizational goals, and your internal culture.
It’s important to determine your employee count, as defined by the legislation. The calculation can be more difficult than you realize particularly if you have part-time or seasonal workers. If you are “on the line” you’ll want to know which decisions might move you from large to small, and are they worth making?
You’ll then consider being fully insured, self-insured, uninsured, or even a creative hybrid of these. Some organizations have elected not to provide coverage, but instead give employees a sum of money to shop on the Healthcare Exchange.
To determine your smartest path, you need to utilize a statistical model. There are so many options and moving parts in this process, it’s not humanly possible to evaluate them all. With the right model you should be able to change variables, such as your workforce metrics, and see the subsequent result.
That’s how you “Moneyball” this outcome
In addition to the statistical model, you need to rely on the insight of an experienced number-cruncher to help interpret the predictive analysis. The assistance will be worth the investment. With healthcare premium rates constantly evolving, and ACA penalties increasing, anything less will end up costing you more.
Start with your accounting firm and find out if their size and level of specialization has allowed them to designate an ACA leader. Because your CPAs already understand your organization’s needs and culture, they are in a great position to guide you through your ACA decision-making process.
You can expect they’ll be able to conduct a full analysis of the impact of the ACA, including a determination of whether, and when, your business is subject to the employer shared responsibility rules and the potential play or pay penalties.
They should make you aware of the short and long term implications of the ACA, and the impact of compliance on your business. They can evaluate your growth and life cycle opportunities as your compliance changes over time. And they should assist with workforce management strategies to help you maintain competitive positioning in the marketplace.
Their role is to continually bring you back to the original question: “What do I want to accomplish by offering employee benefits?”
Benefits are an area you should evaluate annually; advisement on this is not a one-and-done engagement. A good business consultant will proactively guide you through the years, keeping you updated in light of evolving rules and regulations.