#BFE15 and the ACA: Busted myths and top tips
The Affordable Care Act is top of mind for employers – and for good reason. From tough fines to a slew of new tax forms, the Benefits Forum and Expo offered multiple sessions on understanding the ACA.
Here are important points from the experts to help explain the more contentious points of the nation's healthcare law.
Maestro Health busts ACA myths
HR Dive sat down with Jeff Yaniga, the Chief Revenue Officer of Maestro Health, a benefits enterprise company that serves brokers and employers, to discuss what companies can do to cope.
While some uncertainty decreased with the King v. Burwell ruling, it also created a compliance panic, Yaniga said. HR leaders no longer get to wait around and see what the government will do – they must act now.
"It's still very complex," he said. "Employers need to quickly educate themselves on whether or not they can do this work in-house."
Part of that complex work will involve the 1094/95 tax forms, something he calls a waiting "tsunami." The reason: employees will be responsible for one form, which will inevitably lead to confusion and a demand for support tools. Companies will need to have a solution in place that allows employees to access efficient assistance with their forms – be it your HR team, call centers, an online tool or any other solution.
Eventually, Yaniga said, filing these forms will be as ubiquitous and understood as filing a W-2 now. But currently, expect growing pains.
He offered a number of myths that employers believe concerning ACA compliance. Here's a few (other issues discussed farther down this article):
- I've already purchased reporting software – I'm using it to track my employees.
Wrong. Variable Hour tracking and ACA reporting aren't the same.
- I had less than 100 full-time employees in 2014, so I don't need to report for 2015.
Sorry, no. All applicable large employers (those with 50+ FTEs) must report this year, even when qualifying for transitional relief.
- My payroll vendor has all the information already recorded.
Certain payroll vendors are very good about maintaining most of the information. However, they may not know when an employee waives benefits, when an employee's status changes in a way that may affect their code, whether an employee is enrolled in a self-insured plan, or if the employee has enrolled any dependents, for example.
- I can just read the instructions forms and figure it out.
While HR Dive supports long-form reading, the forms are 14 pages long and written for tax experts. Some benefits managers may be good at this. Some won't be. Be sure you know if your company has the expertise on hand – and the staff or technology for data entry – to handle it before you rely on this tactic.
- I can wait and decide later how I'm going to meet the requirements.
If there's anything we heard today, it was that employees need to act now. The ACA requires reporting for each month in the 2015 calendar year. If you don't have accurate monthly records, reporting will be difficult at the end of the year.
Healthcare strategies for what lies ahead: Defined Contribution, 1094/95 reporting
Jim Rogan, SVP for Corporate Benefits at M.E. Wilson Company, shared his perspective on the ACA as one who has advised and helped other companies adapt to the changes.
"The landscape has changed dramatically," he said.
- How should an employer define their defined contribution? Rogan advises that the easiest way is to set it at 9.5% of your lowest wage employee's income. W-2 safe harbor is too complex for most employers, and rating it at the federal poverty level leaves over $200 in responsibility to each employer on average.
- Companies who offer affordable healthcare coverage are struggling with employees who go to Healthcare.gov and claim the subsidy, even though they are overtly disqualified from the subsidy due to their employer offering them healthcare. This behavior will complicate reporting down the line.
- Rogan noted that, back before the ACA, he would have been floored if an employee approached him and wanted three or four plan options for each of their employees. With the ACA's "copper, bronze, silver, gold" template now common place, dual and triple options for plans are almost the norm. Companies looking to jump on this trend need solid decision support technology.
The ACA in 2015: The Courts and the IRS
Laura Molly, JD, gave a rundown of what employers can expect from the ACA right now, including particulars of documents and employee classification.
- Even if you accept the penalty for not providing adequate health coverage, you must report to the IRS that you are not providing health coverage. There is an additional fine for not doing this.
- Most employers were tracking King v. Burwell, which was decided this summer by the Supreme Court in favor of the ACA. Now, keep your eye on Morin v. Dave & Buster's, which alleges Dave & Buster's violated ERISA by reducing employee work hours to avoid ACA regulations.
- Remember that for 2015, the IRS will honor a Good Faith Effort by companies that clearly try to meet all requirements but perhaps accidentally miss one – meaning they won't fine you (this year). Companies who ask for delays, however, may not receive this designation, so file on time.
- Many employers think someone else is handling sections of either their plan design, employer mandate compliance, or reporting. Make sure you know exactly who is handling each of those components.
The ACA story is far from over – legislative debate over the legality of the Cadillac Tax is revving into gear. Keep an eye on this space. We've got you covered.
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