Understanding How the Recent ACA Changes Will Impact Your Clients

By Colin MenchinACA Guy

Just when you thought it was finalized, the Affordable Care Act (ACA) gets changed again. But this time, different rules now apply for different sized businesses at different times, further adding to the complexities of becoming compliant. What does this mean for the clients you serve? Odds are they may be asking that same question for themselves. As their local service provider and workforce management expert, it’s important that you’re well-versed on these changes so that you can effectively communicate them to clients. For more on how you can help your clients prepare for the ACA, watch this webinar to learn more about the Act and the solutions you should be providing to help them ensure compliance.

Less Than 50 Employees

Key Dates

For employers in this group it’ll be business as usual for years to come. This group makes up roughly 96 percent of all US private employers1, so you’re likely to have numerous clients fall into this group. Luckily for them, they will not have to fill out any forms or worry about ACA compliance.

What Should They Do Now?

While they may not have to do anything per se, these employers are encouraged to remind their individual employees that they are still must have insurance by March 31, 2014 to avoid penalties for being uninsured.

Important to Note

You may have some clients that are hovering just below this 50 employee threshold. Clients close to 50 employees should strongly consider implementing a solution, as they may grow or need to add staff, putting them at or above 50 employees. By having a solution already in place, they can immediately begin determining who is eligible for benefits while also generating the necessary reports for the IRS.

50 to 99 Employees

Key Dates

Employers in this group must begin reporting on their current coverage and number of full-time/part-time (FT/PT) employees beginning January 1, 2015. However, these employers are exempt from penalties until January 1, 2016, so they essentially do not have to begin providing coverage to full-time employees until then.

What Should They Do Now?

In 2014, these clients should be selecting and implementing an automated solution to help them manage ACA compliance and determine the best FT/PT mix for their business. As their service provider, you should play an active role in this process by offering a robust ACA solution integrated with the workforce management products you already provide to them. On January 1, 2015, these clients should begin conducting a full 12-month look back period using this solution in order to measure their employees’ FT/PT status for 2016 when clients must offer coverage to full-time employees.

Important to Note

As stated above, employers will not be penalized for ACA compliance failure until 2016. That said, service providers should be taking a proactive approach to prepare clients now. Also, clients slightly above 100 employees should be made aware that the government will be auditing companies to ensure that they are not dropping employees in order to make it into this threshold to receive the extra delay. Lastly, the government has said that seasonal workers employed for less than six months will not be counted for the purposes of determining the employee count of a business.

100+ Employees

Key Dates

The federal government reports that this group makes up roughly two percent of all US private employers1, and that the vast majority of these employers already offer coverage to their employees. To help phase-in the ACA for these larger employers not offering coverage, they will only have to provide coverage to 70 percent of full-time employees beginning on January 1, 2015. At this time, they must also begin reporting on their current coverage and number of full-time/part-time employees. On January 1, 2016, these businesses must be providing coverage to 95 percent or more of all full-time employees.

What Should They Do Now?

These employers need to be getting ready today with the help of you, their workforce management expert. They should already have an automated ACA solution in place at this point, but if they don’t, they should find one immediately. These businesses must conduct a look back period prior to 2015 to determine each employee’s FT/PT status, and the longer the look back period, the less chance that a busy or slow month will greatly skew the data. They are already beyond the point of being able to conduct the suggested 12 month look back period. Furthermore, you should be working with these clients to determine their Pay or Play strategy, selecting the right FT/PT mix for their business, and then determining which FT employees should be offered coverage first in 2015.

Important to Note

While the 50-99 employee group has an extra year before compliance failure penalties can hit them, employers in the 100+ threshold can be hit with penalties in 2015. While this isn’t the first ACA delay, the Obama administration has said that these are final, so employers should be planning accordingly and preparing immediately if they have not been already.

Making the Most of the Delay and New Mandates

Let’s face it, even with these recent changes to the ACA employer mandates and the delays to their subsequent penalties, the Affordable Care Act is becoming a reality with many businesses expecting their costs to rise. Not only does this provide an opportunity for service providers to offer their ACA solutions, but right now is a fantastic time to be communicating the many benefits of your workforce management solutions, all while positioning your company as a thought leader. Key points to focus on with this are that they increase workforce productivity, and that by doing this, they can help offset some of these future ACA costs that have business owners concerned. With these delays, businesses now have some time to explore the complete range of solutions you provide. We strongly encourage service providers to use this extra time to help employers prepare for ACA, while also communicating how your solutions can benefit them in other areas while giving them the ROI to cover some of their future ACA costs.

How successful have you been in preparing clients for the ACA? Please share your thoughts and experiences below.

1http://www.treasury.gov/press-center/press-releases/Pages/jl2290.aspx

About Colin Menchin:
Colin is a Marketing Specialist at SaaShr responsible for the marketing strategy and programs of the company along with other responsibilities within the department.

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