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.
Q: What happens if employers decide not comply with ACA mandates?
A: The ACA health care reform is a pay-or-play scenario. Employers do not have to offer adequate health care, but they will face fines and penalties if they choose not to do so. For instance, a large employer could face a penalty of up to $2,000 a year per full-time employee — not counting the first 30 employees — for not providing coverage.
Q: How is Paycom helping its customers comply with the new health care reform rules?
A: Paycom's advanced report-writing capabilities give our customers the flexibility of storing and using their data across multiple date ranges; provide data integrity within our proprietary cloud technology and gives data analytics. Our payroll database tools give employers the ability to determine whether or not they qualify as a large employer (50 or more employees) as defined by the ACA. We empower employers by allowing them to track the number of hours worked by each employee and by determining whether or not they are offering affordable coverage. With our document management and on-boarding features, businesses have easy access to cloud storage of required ACA documents like proof-of-exchange notice. Overall, we mitigate ACA exposure by providing tools to our clients to help them determine whether they are compliant.
PAULA BURKES, BUSINESS WRITER