20 Portions of the Affordable Care Act that ALL Employers Need to Understand, and Have a Plan to Manage

The Affordable Care Act, regardless of your opinion of the Bill, has unleashed a wave of administrative responsibilities on employers.  More importantly, for most companies, their traditional methods of managing benefit-administration will be insufficient. (click HERE to access the whole bill via healthcare.gov)

Listed below are 20 portions of the ACA which impact employers; it is not the only 20, but it is the biggest and most immediate portions of the bill you must prepare for now.  Beneath each section of the bill, I have posed a rhetorical question for you consider, or I have made a statement per essential tools/functionality you will need to meet the new requirement.

If you are an employer, or an administrator for a company, as you read this list, ask yourself these 3 Questions:

  • Are we ready to take on these new responsibilities with our existing administrative staff?
  • If I am asking my broker (or other outsider) to help me administer the ACA, how will they access my system of record: my payroll, my HRIS, and my Time & Attendance system to properly administer these sections?
  • Are we as an organization prepared to assume the liability of correctly executing these laws?
  1. Sec. 1001 – Employers cannot limit coverage based on the wages or salaries of full-time employees.
    1. you must be able to easily cross-report payroll and benefit data
  2. Sec. 1103 – You must be proficient in a new administrative tool so you can get answers to your questions, and your employee questions, per the ACA.
    1. you must have the time available in your benefit administrator’s day to take on a new tool and look up all answers for employees
  3. Sec. 1312 – You must understand “Consumer Choice.”
    1. Do you feel confident in your ability as an employer to answer employee questions; this includes the time it takes to get the answer and the responsibility of providing the correct answer?  Plus you must maintain proficiency in this system
  4. Sec .1333 – Provision Relating to Offering of Plans in Multiple States.
    1. Is your existing Benefit Administrator capable of taking on the responsibility for multiple state plans, the uniqueness of each states laws, and the difference in your requirements to administer the plans
  5. Sec. 1343 – Health Plans and Health Insurers with an employee group which is below the average “actuarial risk” of all employees in the state, will pay an additional charge to offset groups with an above average “actuarial risk” rating.
    1. Have you planned for this potential pass-through cost, how will you report on this to budget for the expense?
  6. Sec. 1411 – Here is a look at how eligibility is determined.
    1. This carries the possibility of a significant increase in your administrative burden as employees go through multiple “eligibility changes,” including the need to cross-report HR-demographic data with Benefit Coverage
  7. Sec.1412 – Premium Tax Credits and Cost Sharing Reductions
    1. As Cost Sharing Reductions and Tax Credits are charged or applied to the issuer of the health plan, how will you facilitate communication between the State, your Broker, the Carriers and your Employees?  How will this communication be formalized, tracked and reported?
  8. Sec.1511 – Employees must automatically be enrolled in Benefits by the Employer, unless the employee “opts out” of coverage.
    1. This, again, is your responsibility, not a Broker’s.  How will you plan for the increase in administrative work to enroll every employee in coverage unless they “opt out?”  How will you track “opt outs,” how will you communicate this employee decision to the State, your Broker and the Carriers?
  9. Sec.1513 – This section speaks to your penalty for not offering Health Coverage
    1. How will you manage this cost, and manage the administration of communicating the decision to the State?  If your competitors offer Health Coverage, how will you compete in the War for Talent when recruiting the best possible employees?
    2. click HERE to see a flowchart from Kaiser explaining the Employer Penalty
  10. Sec.1513 – This section speaks to special rules per an Employee’s eligibility.
    1. This will require you to cross report Time & Attendance Information with Benefit Information to determine employee eligibility based on hours worked, days worked a year, plus you will need to be able to forecast eligibility based on scheduling to financially budget for employee participation.  If you rely on a broker to handle this, how will they be able to reference the “look back period” to determine hours worked, and how will they access scheduling to help budget your costs?
  11. Sec.1514 – Any employer that is required to comply with the Health Bill must report Health Insurance Coverage information to the State, at an interval which is yet to be determined.  Every time you produce this report, you must communicate with the employee that the report was produced and sent.
    1. How will you manage this significant increase in documented communication with the employee?  If the report calls for Demographic Data, Hours Worked Data, Benefit Election Data and Payroll Data, how will you cross-report all of this information?  Have you allotted the time required to add this administrative burden to your existing staff?
  12. Sec.1557 – This section provides specific language guarding against discriminatory practices per Administration of the Health Care Law as defined in the Civil Rights Act of 1964.  It also expands upon the definition of discriminatory to include employee status, wages, etc.
    1. If an employee challenges your administration of Health Care as a discriminatory action, how will you report on all payroll, HR, Benefit and Time & Labor Data across your entire employee population to produce your supporting documentation?  If a Broker is responsible for Benefit Administration, how will they support your efforts in collecting information to challenge such a claim?
  13. Sec.4207 – This section defines clear rights for nursing mothers.
    1. Is your company’s Policies & Procedures, and the facility, complaint with this provision?
  14. Sec.4302 – This section allows for the State to conduct an analysis of all employees and benefit related data to conduct quality-analysis of the impact of the legislation.
    1. Again, as explained above, do you have a robust cross-departmental reporting capability to sufficiently meet the requirements of this provision?  Do you have the time needed to respond to these surveys?
  15. Sec.4304 – This section is similar to Sec.4302 above which allows a Director from the government to “conduct a national work site health policies and programs survey.”
    1. Do you have the time available, per your Administrators responsibilities, to add this additional burden to their work load?
  16. Sec.9001 – Cadillac Plans – this section speak to the penalties an employee will incur for Health Plans in excess if fixed dollar amounts
    1. Have you planned for the increased cost of the penalty?  These plans also have specific requirements for how they are administered, how they are reported, and how the plans are communicated to employees.  Have you planned to educate you Administrators on the specifics of Cadillac Plans as well allotted the time needed to administer and report on them?
  17. Sec.9002 – W2 reporting.  This section provides specific guidance per reporting Benefit Expenses on an employee’s W2.
    1. Do you have a payroll system which automatically inserts your benefit data in the W2?  If you are relying on a Broker to administer your benefits, how will they access your payroll information and properly process your Quarterly Tax Filing and your W2s?
  18. Sec.9006 – Different Health Care options now have specific language dictating how these plans are to be administered.
    1. Are you prepared to have your Administrator correctly manage HAS, FSA, CDHP, as well as Public and Private Exchange Options?  Who takes these calls?  Mercer estimates that employee’s questions around Open Enrollment alone will increase 50%, and that doesn’t take into account Life Change Events and Status Changes.  Are you staffed to handle this increase work load?
  19. Sec.9007 – Are you even aware of the changes to how proceeds, property, etc. are classified and reported as income on an employee statement?
  20. Sec.9012 – this Section speaks to the elimination of Deductions for Expenses allocable to Medicare Part D.
    1. As the bill continues to evolve, and as changes to statutory deductions are made, are you prepared to stay on top of all changes and effectively implement those changes to your system of record?

To see the history of the bill via Wikipedia, click HERE

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