By Alexandra Arbelaez
Significant healthcare reform changes, namely via the Patient Protection and Affordability Care Act (PPACA) or Affordable Care Act, are on the horizon. Beginning in 2014, businesses with over 50 full-time equivalent employees* will be required to extend coverage to employees or face possible penalties. In fact, according to a study conducted by Mercer, 60 percent of respondents expect an increase in costs, and one-third of those expect an increase of 5 percent or more. Due to the large percentage of businesses that may be impacted by this, service providers like you should be able to capitalize on the sizable influx of employers looking for solutions to combat these cost increases.
Here are several key areas you’ll want to educate prospective clients on:
1. Monitoring Compliance – As a service provider, you should give prospective clients the feeling that you have their best interests in mind, and that they will not be alone when adjusting to these changes or when monitoring their compliance with Affordable Care Act. A time and labor management application should help with compliance by actively tracking employee labor data, generating reports for management, and alerting senior-level staff should a compliance issue arise revolving around hours worked. Additionally, as a service provider, you should be providing a solution to help clients remain compliant through reporting in many other areas, including Vets 100, OSHA, and New Hire.
2. Potential Fines – Many employers are at risk to legal action from employees, in addition to steep fines from the government, if they do not maintain proper compliance with PPACA. In fact, fines can reach as high as $2,000 per employee per year. According to the legal calculation of the fines, a 52-person company that fails to offer its employees coverage could face up to $44,000 in fines**. It is important for service providers like you, with workforce management applications that can monitor the Affordable Care Act compliance, to communicate to prospective clients that your offerings are an effective tool to help with remaining compliant and avoiding these fines.
3. ROI of Workforce Management Applications – Whether an employer chooses to comply and provide coverage, not comply and instead pay the penalties, or create manual processes in an attempt to work around the law, their operating costs will almost certainly increase. These employers will be looking to cut costs elsewhere, and workforce management is an area you can easily sell them on. According to Nucleus Research, the average organization realizes a return of $7.88 for every dollar invested in workforce management applications. Remind prospective clients that your workforce management platform combines an advanced mix of products that will save them both time and money by reducing the associated administrative burden of manually completing tasks.
The intricacies of the Affordable Care Act, coupled with steep fines for compliance failure and potential cost increases for business owners, is creating a lot of stress and uncertainty for employers around the country. As a result, many companies now have to re-evaluate their internal processes and vendors with respect to workforce management. This creates a monumental opportunity for service providers like you to become a thought leader for these companies by educating them on how the impending health care reform law changes will impact their business, and what you can do specifically to help them adjust to these changes.
* Full-time employees are anyone who works an average of 30+ hours per week in a month.
** Calculation: (52 – 30) × $2,000 = $44,000
Formula: (Total Employees – 30) × $2,000 = Fine Amount
About Alexandra Arbelaez:
Alexandra Arbelaez is the Business Development Manager at SaaShr responsible for nurturing existing relationships and prospecting for new channel opportunities through market research and contact management.