The Patient Protection and Affordable Care Act (PPACA) often referred to as Healthcare Reform or ACA, was designed to increase access to health insurance for Americans. This legislation greatly impacts the business sector and provides unique challenges for employers as they must comply with new regulations or face penalties. Healthcare Reform compliance rules can be very confusing and complex for businesses. By partnering with a Professional Employer Organization (PEO), your business can take advantage of expert guidance and administrative relief as it navigates the complexities of Healthcare Reform.
Administrative Support for Increased Requirements
There is a much larger administrative burden now on employers to handle issues such as meeting reporting requirements, preparing and delivering employee communications, and calculating and paying taxes. For example, the “Shared Responsibility” provision of the ACA requires employers to keep thorough records of employee hours so they can determine part-time or full time status every month. A PEO can make ACA compliance easier and more efficient for businesses by assisting with the tracking of data and helping to automate time-consuming administrative processes.
New laws also require employers to provide employees with various notifications, including summary of benefits and coverage notifications, public exchange notifications, and W-2 reporting. Employers must also evaluate Medical Loss Ratio Rebates, determine what to do with the rebate dollars attributable to employee contributions and administer these rebates. PEOs are in a unique position to support businesses in complying with these requirements, as they are already managing payroll data, benefits plan information and employer tax withholding as part of the PEO relationship.
Deciding on the Best Coverage Option
Employers will need to evaluate the total cost of providing health insurance to their employees and determine how these new regulations will impact their businesses. Insurance issued in the small group market will be subject to Adjusted Community Rating. In the past, insurers were allowed to charge higher rates to people based on gender, health status, medical claim history or other factors. However, as of January 1, 2014, insurers can only set rates based on a limited set of factors such as age, geographic area and tobacco use, and only limited variations will be permitted within these factors.
Groups with younger, healthier people may see significant increases, while groups who had previously higher rates could see a decrease. Working with a PEO can give your company the ability to offer your employees a large group plan that is not subjected to the Adjusted Community Rating. A PEO can also help your company decide on the healthcare plan that works best based on your business strategy. There are many different options with different levels of costs and other burdens that need to be evaluated.
Employers need to know that PEOs can relieve businesses of the administrative and compliance requirements for medical benefits, employee communications and government requirements associated with the Affordable Care Act. Your business can take advantage of the expertise and support needed to evaluate your options and comply with the latest requirements.
