More than six years after the Affordable Care Act (ACA) became law, we are just beginning to see some of the results of its implementation. From the health of the federal exchanges to the number of Americans now insured, there is a lot of information about the ACA to pay attention to. For employers, that information is critical. Companies need to know where they stand in order to maintain ACA compliance from one year to the next.
In light of the fundamental changes the ACA has introduced to the small business area, we thought it might be interesting to ask a few key questions. Below are five of the most fascinating questions, along with answers.
1. Are companies reducing hours in order to comply?
Critics of the ACA warned that companies would start limiting the hours of their workers in order to avoid having to pay for expensive medical insurance. As early as 2013, we began to see that happen. It is still happening today, though not to the same extent it was. Furthermore, almost all of the jobs added to the economy since mid-2010 have been full-time jobs. Full-time jobs come with health insurance as per ACA mandates.
2. Who is handling ACA compliance?
The question of who is actually handling ACA compliance within the workplace is fascinating, if for no other reason than there appears to be no concrete answer. Larger companies may have a dedicated officer responsible for health insurance or leave the responsibility to the CEO. In mid-sized companies, it tends to be the responsibility of the HR department or someone in accounting. Small businesses tend to rely on their payroll providers to handle it for them.
3. Is the ACA actually reaching its coverage goals?
The key to the success of the ACA is enforcing ACA compliance. So, how's it going thus far? Government statistics show that some 20 million Americans have been insured since the implementation of the law. More than 11 million people access health insurance through the federal exchanges alone, with just over 6 million of them being young adults between the ages of 19 and 25.
4. Are health insurance costs increasing for workers?
Unfortunately, maintaining ACA compliance is shifting a greater burden of the health insurance bill onto workers. According to a recent report from the St. Louis Post-Dispatch, the average family health insurance plan for 2017 will see premium increases of about 5.5%. But higher costs go further than just monthly premiums. Deductibles are also adding to the financial burden. The Wall Street Journal reports that for the first time in history, more than half of American workers will have health insurance deductibles exceeding $1000.
5. How are employers coping with ACA compliance?
ACA compliance continues to be an area of concern among employers. Not only is the law confusing, but there also seems to be a lack of cohesion where data collection, management and reporting are concerned. Companies can be grateful the IRS did not enforce compliance strictly for the 2015/2016 calendar year, but that is unlikely to continue next spring.
ACA compliance is neither voluntary nor something to be dismissed. The IRS will, in all likelihood, be quite a bit more aggressive in its enforcement efforts at the end of the 2016/2017 tax year. If your company is still not prepared to meet compliance requirements, that needs to change sooner rather than later. BenefitMall offers a full range of payroll services including full ACA compliance. Please contact us to learn more about how we can help you steer clear of the IRS by maintaining compliance.
Check out how our ACA Compliance tool can help you keep pace.
FiveThirtyEight – http://fivethirtyeight.com/features/yes-some-companies-are-cutting-hours-in-response-to-obamacare/