Is your business ready for healthcare reform? Although the Obama administration recently delayed the employer mandate enforcing penalties on large employers who do not provide appropriate coverage until January 2015, many provisions of the act will require action in the following months.
Following are ten things you need to do to make sure your business is ready for the Patient Protection and Affordable Care Act (PPACA):
- Determine Your Requirements: Different rules, tax credits and marketplace options apply to businesses based on whether they have fewer than 24 full-time employees, 24 to 50 full-time employees or more than 50 full-time employees. As an added twist, full-time in this case is defined as 30 hours or more per week, with special calculations for determining whether non-traditional workers qualify as full-time equivalents.
Although many businesses will quickly fall into one category, determining status can be especially tricky for those at the thresholds or those who employ many seasonal or part-time workers. For more information on determining your employer status, determining worker status and employee measurement periods, watch our Healthcare Reform Update Video or visit healthcare.gov.
- Make Sure Your Health Plans Are Qualifying and Affordable: Under the mandate, large employers must provide full-time employees with coverage that is both qualifying (meaning it covers a minimum of 60 percent of healthcare costs) and affordable (costing less than 9.5 percent of employee income). Work closely with your benefits broker to make sure your healthcare plans are eligible for continuation, either by choosing new plans that meet PPACA requirements or via grandfathered health plans.
- Distribute Notices of Exchange: Employers must provide notices to all current employees informing them of the existence of new healthcare exchanges and details about employer-provided plans by October 1, 2013 (thereafter, new hires must receive the notice within 14 days of hire). Model notices can be found on the Department of Labor (DOL) website for employers who offer benefits to all or some of their employees, and for employers who do not offer healthcare benefits to their employees.
- Update Your COBRA Election Notice: COBRA election notices must now inform employees of options available under government-run healthcare exchanges. Find a model election notice at the DOL website.
- Report Employer-Sponsored Health Benefits on W-2s: Employers who file more than 250 W-2s per year are already required to report medical benefits including major medical coverage on W-2s. Starting in January 2014, employers filing fewer than 250 W-2s per year must also meet this requirement. See IRS Notice 11-28 for more information.
- Start Watching Those Hours: Complying with PPACA requirements means making sure part-time employers work part-time hours―no more than 30 per week. Communicate the need to stay within these limits to managers―or risk having to provide coverage or pay a penalty for employees who cross over into eligibility.
- Audit Your Payroll System: The increased need to track and report worker classifications and manage hours worked means you’ll be relying heavily on your payroll system. To ensure adequate reporting, check that your payroll system can do the following:
- Track hire and rehire dates, particularly if you have employees with have multiple hire dates, such as temporary staff.
- Track unpaid absences which can affect the classification of employees. For example, if an absence is 26 weeks or longer, it may be possible to classify the employee as new.
- Document employment statuses. Not surprisingly, your payroll system must to be able to classify who is part-time, full-time and seasonal.
- Report hours worked. This will help ensure part-time employees who are ineligible for healthcare benefits stay under 30 hours a week.
- Handle automatic enrollment. If you have more than 200 employees, you’ll also want to be looking ahead to the (currently delayed) provision requiring automatic enrollment capabilities.
- Look into Wellness Programs: The PPACA increases incentives for wellness initiatives like fitness programs, allowing for premium decreases of up to 30 percent―and a whopping 50 percent for participation in tobacco cessation programs.
- Don’t Forget those Waivers: Make sure to collect waivers for all employees who decline healthcare benefits. Failing to do so can lead to penalization if the employee seeks coverage through public exchanges.
- Establish Your Communications Plan: Reporting changes in healthcare coverage to employees isn’t just a legal imperative, but a practical one. You will need a plan for distributing ongoing notices as well as for answering employee’s questions about how healthcare reform will affect them.
As part of your communications program, you may also want to consider strategies for helping employees become better healthcare consumers and for affirming your organization’s commitment to providing quality options to employees who may be alarmed by the changes they see. With potential premium increases on the horizon, it may be useful to open a discussion about the cost of benefits provided by the organization. This can help increase understanding about how employers share the burden of healthcare expense and show employees how much they are valued.
Have more questions about the latest in healthcare reform and its effect on your business? Watch our Healthcare Reform Update Video from Sikich’s Hot Topics in Employment law seminar for more information.
Author: Donna Mehrabi
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