Article | August 30, 2013

What Retailers Need To Know About The ACA

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By Team Ceridian

The 2010 passage of the Affordable Care Act was one step toward a massive overhaul of the way U.S. insurers provide healthcare to their citizens. The ultimate goal of the legislation was to improve the quality and affordability of health insurance coverage for everyone, thus leveling the playing field and making for a better quality of life.

That’s the ultimate goal. In the short run, though, one major effect of the ACA has been a greater level of emphasis on healthcare among corporate HR executives who provide benefits. Companies are facing increased pressure to keep their employees covered, and that means more insurance options and open enrollment periods for employees.

Ceridian recently hosted a webinar on this trend, entitled “Delivering Best Practices,” that examined the effects of the ACA on businesses in great detail.

Our current environment
Andy Gilley, a Ceridian Solutions consultant who strategies for Fortune 100 companies, explained in the recent webinar that in the wake of the ACA’s passage, the environment has become more complicated for companies that seek to provide their employees with affordable health coverage.

“We’re in a complex environment,” Gilley said. “We know that. We are seeing many more options with plan designs. Some would argue that they like the choice, but ultimately what that has done is it has created complexity, complexity and confusion for many employees – employees and employers, really. And again, healthcare costs are on the rise, I can’t imagine that changing anytime soon.”

We’ve seen numerous changes. Plans have become more complicated, with many rules muddling the benefits process. Costs are rising for employers and workers alike, and it’s unclear whether ownership of the problem belongs with the employees or their bosses. Debate will rage on about how to make healthcare more affordable, but the current system has placed a significant strain on companies’ HR budgets.

Key provisions of the ACA
For HR executives now facing the challenge of providing benefits for their employees, there are three important provisions of the ACA to bear in mind.

For companies that have 50 or more full-time employees, offering benefits to these people is now required. That includes employees who work the equivalent of full time, even if “full time” isn’t contractually specified.

This coverage must be deemed “affordable,” and the employee’s premium share should be less than 9.5 percent of his or her wages, as specified in box 1 of his or her W-2.

Coverage for these employees must also meet the “minimum value” requirement, covering at least 60 percent of the total cost.

Gilley says he’s spoken with members of the HR community about these provisions. Right now, the ACA is still in the early going, and the rules are just beginning to take effect. We’re in the midst of a trial period with the new legislation.

“I asked them what they thought about this delay in the mandate, and they had a really good attitude about it,” Gilley said. “They simply looked at the delay as an opportunity to have a parallel testing phase, they were calling it. So a nice place to be.”