BTerrell Group Blog

A Study in Unintended Consequences - ACA Results in Shorter Employee Workweeks

Posted by Brian Terrell on Mon, May 18, 2015

The construction industry seems to be booming in the Dallas/Fort Worth metroplex, so I was surprised to recently hear of a young man in Dallas having trouble finding a job working 40 hours per week in that industry. As I considered the situation, I realized that many companies may be lowering the number of hours available to employees, and this could be an unintended consequence of Affordable Care Act (ACA) requirements taking effect in January 2015.

UNINTENDED_CONSEQUENCES

The ACA requires employers to provide coverage or pay a penalty based on the number of employees working 30 or more hours per week. The Employer Shared Responsibility provision of this statute defines a full-time employee as an individual employed on average at least 30 hours of service per week, and this provision applies only to employers with 100 full-time employees starting in 2015 (50 full-time employees starting in 2016).

As a result, many companies across various industries are changing scheduling activities. According to Fox Business, Mercer, a human resources consulting company, conducted a survey that concluded that 12% of all U.S. employers reported plans to reduce workers’ hours as a direct result of the ACA. Fox Business also reported that in a survey conducted by the Society for Human Resource Management (SHRM), 41% of 603 small business owners said they have delayed hiring because of the federal healthcare law. One in five had already cut hours when the survey results were published. A report from the UC Berkeley Labor Center shows which workers are most at risk of reduced work hours under the ACA.

Constuctionbusinessowner.com suggests seven steps to prepare for ACA regulations including tracking employee work hours and determining who you must cover, but I suggest leaving the details to the experts to help avoid penalties. Luckily for Intacct users, AmeriFlex Workforce (integrated with Intacct through WorkforceGo!) helps make ACA compliance monitoring easy by simplifying processes around ACA compliance, providing accurate visibility into average hours worked by full-time and part-time employees (including the look-back and stability periods), and automating benefits eligibility notification and open enrollment.

Contact us for more information about AmeriFlex Workforce and how it can help simplify ACA compliance for your company.

Tags: Affordable Care Act, ACA, AmeriFlex, Workforce Go!, ACA compliance,

Are You Prepared for the 2015 ACA Reporting Requirements?

Posted by Brian Terrell on Tue, Dec 09, 2014

Starting in January 2015, the Affordable Care Act (ACA) requires employers to significantly increase their information reporting responsibilities. For example, if your small business (fewer than 50 employees) provides self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover.

For larger employers (50 or more employees), the reporting requirements are even greater. Starting in calendar year 2015, large employers must file an annual return reporting whether and what health insurance you offered your employees. In addition, if large employers provide self-insured health coverage to employees, they also will have to file an annual return reporting certain information for each employee covered. All three of these rules were optional in 2014.

The table below, created by McGladrey, shows a basic overview of what forms are required in different circumstances.

Employer Size Employer Health Plan Employer Files Forms 1095-B/1094-B Employer Files Forms 1095-C/1095-B
Small employer None No No
Small employer Insured No (insurer files forms) No
Small employer Self-insured Yes No
Small employer treated as large None No Yes
Small employer treated as large Insured No (insurer files forms) Yes
Small employer treated as large Self-insured Yes Yes
Large employer None No Yes
Large employer Insured No (insurer files forms) Yes
Large employer Self-insured Generally, no Yes

 

Unfortunately, knowing which form to use is only part of the battle. The real question is whether or not you have the infrastructure in place to manage the requisite information.

Form 1095-C alone requires this information reported to the IRS:

  • The employee’s name, address, and Social Security number
  • The employer’s name, address, and employer identification number
  • Whether the employee and family members were offered health coverage each month that met the minimum value standard
  • The employee’s share of the monthly premium for the lowest-cost minimum value health insurance coverage offered
  • Whether the employee was a full-time employee each month
  • The affordability safe harbor applicable for the employee
  • Whether the employee was enrolled in the health insurance plan
  • If the health insurance plan was self-insured, and the name and Social Security number of each employee and family member covered by the plan by month

Do you have a plan in place to collect this data? If not, now is the time to consider how you will gather and track this information. Excel spreadsheets, manual calculations, and ad-hoc reporting may feel comfortable because of familiarity; but comfortable isn’t always compliant or easy. Due to the potential for steep penalties, employers need a reliable solution (such as the AmeriFlex Workforce ACA Compliance Monitoring Module) that offers visibility and flexibility to adapt to new requirements down the road.

If you are unsure if your infrastructure can meet the demands of the 2015 ACA reporting requirements, contact us today for a free consultation.

Tags: AmeriFlex, AmeriFlex Workforce,, ACA compliance,

Why Is It Important for Employers to be “Technology Ready” for the Affordable Care Act?

Posted by Brian Terrell on Thu, Sep 11, 2014

By now, you have surely heard about the employer mandate included within the Affordable Care Act (ACA), often referred to as “play or pay.” (Quick recap: Employers must offer “minimum essential health coverage” to full-time employees that is both “affordable” and offers “minimum value.”) But do you understand all of the implications on your small or midsize business? Does the mandate apply to you? How do you calculate full-time employees?  Do you factor in employees working for your company outside the United States? What if you make a mistake?

Here are a few startling details about the employer mandate that I’ve come across:

  • If an employer subject to the mandate does not provide “minimum essential health coverage” to full-time employees and a full-time employee then obtains subsidized coverage on an exchange, the IRS may assess an annualized penalty equivalent to $2,000 multiplied by the total number of full-time employees in the workforce.
  • If coverage offered is not considered “affordable,” then the IRS may assess an annualized penalty of $3,000 per eligible employee who seeks subsidized coverage under an exchange.

In June 2014, the U.S. Chamber of Commerce released a statement saying, “Despite the commendable efforts of the officials at the Treasury, exceedingly high administrative burdens and expenses remain as businesses grapple with how to comply with the reporting requirements contained in the statute.”

Are you ready for ACA

Fortunately, companies like AmeriFlex help businesses become “technology ready” for the upcoming changes. Most small to midsized companies do not have a full-time employee who spends his day researching the tax implications of the ACA, so it is not only helpful, but probably imperative, that SMB owners identify and invest in a solution that integrates payroll, time, labor, and HR/benefits administration while enabling real-time, ACA-compliant reporting. Spreadsheets, homegrown reports, and manual calculations will do little to simplify a highly complex process that has potentially significant financial consequences. Are you “technology ready” for the ACA? If you do not know, now is the time to contact us for a free consultation. An investment ensuring technology readiness for the ACA can dramatically reduce costs and administrative burden while allowing small to medium sized business owners freedom to focus more time, energy, and resources on what they do best – serve customers!

Tags: ACA, technology ready for ACA, AmeriFlex, Affordable Care Act technology