Q&A with Stacey Pezold
Many employers may not fully grasp health care compliance
Q: Paycom recently held webinars for its customers to better understand the Affordable Care Act and the key mandates related to health care reform. Based on the results of a survey that was conducted following the webinar, do you think businesses understand the Affordable Care Act?
A: Many employers think just because they offer insurance they are in the clear; in fact, it is not quite that simple as there are many other factors involved that employers must deal with to remain ACA compliant. For instance, employers must notify employees of health care alternatives offered through health insurance marketplaces within 14 days of their hire date and current employees must be notified no later than Oct. 1. Because of the magnitude of the ACA, we have plans to educate employers outside of our Paycom clients to see if their payroll provider is adequately meeting their ACA needs.
Q: What are the key mandates discussed for employers?
A: Businesses with 50 or more full-time equivalent employees (based on a formula that includes part-time workers) must offer health insurance or face fines. These “large employers” as defined by the ACA must offer health insurance to 95 percent of employees who average 30 or more hours a week, or 130or more hours a month. Moreover, the insurance must be affordable, i.e. a worker can't pay more than 9.5 percent of his annual salary (W-2 Box 1 Wages) for individual coverage.
Q: Are businesses meeting the ACA requirements?
A: Not all of them. Eleven percent of companies who'll be subject to the mandates don't offer health insurance to more than 95 percent of their full-time employees; 30 percent have employees who pay more than 9.5 percent of their annual income for individual health insurance; and 9 percent don't offer plans that pay at least 60 percent of covered health costs — another requirement of the ACA.