No faith in HR to understand health care reform

As confusion around the Affordable Care Act reaches a clamorous crescendo, many companies don’t have faith that their HR departments actually understand the new regulations.

When business owners were quizzed about their organizations’ understanding of the ACA, most lacked any sense of confidence but nevertheless expected that HR would be able to sift through the details and reach complete compliance at some stage in the future.

• 70% of business owners were confident that their organizations would be compliant with all new ACA regulations
• 60% said their organization had the tools and information needed to make the right decisions on health benefits
• 48% agreed that their organization actually understood all the new ACA regulations

An earlier Deloitte survey in May-June 2013 indicated a similar lack of trust in HR:

• Only one in three employers felt their HR department was completely prepared for healthcare reform
• 40% of HR executives felt that their companies were completely prepared for reform, but only 34% of owners/CEOs/presidents
• 2% of HR executives felt that their companies were not at all prepared, compared with 22% of CFOs

However, complete understanding of ACA at this point is a big ask of most small and medium employers, says Gibson employee benefits specialist Wes Mantooth. He said that while almost every large company was already prepared, he was seeing too many small- and medium-sized businesses that had procrastinated because of confusion.

“Now is the time to act and make the decision to plan,” he said. “You need to be able to equip your employees with the information to make better decisions and also engage them with the incentive to do so.”

Get smart: resources to educate yourself about ACA

• Healthcare.gov Part of the renovated site is dedicated to businesses, with FAQs and live help
• US Small Business Administration Even if your company isn’t strictly small, you’ll find helpful articles and guidelines here
• US Department of Labor Though the site is difficult to navigate, the Employee Benefits Security Administration has all the information you need – if you can gather any sense out of the technical legal releases
• Health insurance providers Most health insurance providers have clear, simplified guides for employers, including timelines so you know when changes need to be implemented
• Official state navigators If your company has less than 50 employees, some states have funded ‘navigators’ to guide individuals and small businesses through the marketplace system. They’ll meet you in person and talk you through the details as applied to your particular situation

Employer Shared Responsibility Payment

• A requirement that all businesses with over 50 full-time equivalent (FTE) employees provide health insurance for their full-time employees, or pay a per month "Employer Shared Responsibility Payment" on their federal tax return
• The employer mandate is based on full-time equivalent employees, not just full-time employees
• The fee is based on whether or not you offer affordable health insurance to your employees that provides minium value (explained below).The annual fee is $2,000 per employee if insurance isn't offered (the first 30 full-time employees are exempt)
• If at least one full-time employee receives a premium tax credit because coverage is either unaffordable or does not cover 60 percent of total costs, the employer must pay the lesser of $3,000 for each of those employees receiving a credit or $750 for each of their full-time employees total
• The fee is a per month fee due annually on employer federal tax returns starting in 2015. So the per month fee is 1/12 of the $2,000 or $3,000 per employee
• Unlike employer contributions to employee premiums, the Employer Shared Responsibility Payment is not tax deductible
   

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