Marketplace premium costs during the Summer of 2013, ACA will now only release the specifics of their costs when they open on October 1st.
Wrestling with the ACA
HR Managers across the nation are frustrated with the ACA. Here are the major complaints and what businesses are doing about them...
It’s been over five years since the ACA (Affordable Care Act) was signed into law and business owners and managers are still struggling with the heavy list of compliance requirements. “The ACA has made benefits much more complicated than they ever were before,” said Sally Roberts, Director of HR at Morris Communications Company, at a recent House subcommittee meeting. So what are the major complaints about the ACA and what are businesses doing about them?
One major frustration with the ACA is its definition of “full-time employee” being someone who works 30+ hours a week rather than mirroring the FLSA standard of 40+ hours/week. According to a recent SHRM survey, 14% of employers said they had already reduced their part-time employees’ hours to drop below 30 hours, and 6% had plans to do so. Simply designating your employees as “part-time” won’t satisfy the requirement though; they truly cannot be working an average of 30 hours or more a week, and qualifying employers not providing benefits to employees working 30+ hours will result in a penalty. What exactly is a qualifying employer? The next headache on our complaint list…
Many managers’ heads are still spinning as they juggle workplace demands while trying to avoid being a “qualifying employer” – at least until 2016. Large employers with 100+ employees had to “pay or play” beginning in January of 2015, but midsize employers of 50-99 full-time (or full-time equivalent) employees could qualify for “transition relief” to delay their “pay or play” decision until 2016. How is size determined when not all employees work full-time? Companies that employ a large number of part-time employees have to calculate average hours to determine the number of full-time equivalent employees, and those with seasonal workers have to calculate hours spread over months of employment to determine whether they truly are seasonal workers and not part-time employees. (Suddenly you have a new response to your teenager’s question about when he’ll ever use math in life.) Breaking up your business into smaller sub-businesses is not permissible, either, as all companies with common ownership or control are considered to essentially be one company for employee headcount when determining “pay or play” eligibility.
The upcoming excise tax that takes effect in 2018 for “Cadillac plans” is another pain for many employers. According to the SHRM survey, 33% of companies have or are planning to make benefit plan changes, 9% have already made changes, and 24% are planning to conduct an analysis of how to avoid the 2018 excise tax. Although many employers don’t offer a plan subject to the tax, those that do will need to conduct a thorough analysis to meet their employees’ needs while creatively amending their plan.
Due to its heavy list of compliance requirements, the ACA is not only adding to the cost of employee benefits, but also creating a strong distaste for HR Managers. Just navigating the law and ensuring every component of compliance has become a full-time job. Please contact our Stratus.hr team to help relieve any pains you’re experiencing with the ACA.