How will the ACA affect Human Resources?
The passing of the Patient Protection and Affordable Care Act (ACA) is shaping up to be the most complex HR compliance challenge for employers in U.S. history. Many predicted the Supreme Court justices would strike down at least part, if not all the law as unconstitutional. However, that didn’t happen and caught many by surprise. The Supreme Court ruled it constitutional and ever since the ACA has been moving ahead at full speed.
Most human resources professionals acknowledge that the U.S. healthcare landscape is going through profound changes. A survey of human resources professionals on their attitudes and behaviors regarding certain upcoming ACA requirements found some very interesting results.
- 52% see the U.S. healthcare landscape profoundly changing thanks to healthcare reform
- 83% say the cost of providing employer sponsored healthcare will become a barrier to achieving business outcomes
- 71% indicated they may replace their traditional employer sponsored plan with a consumer driven plan
- 55% plan on increasing deductibles to help control healthcare costs
- 48% plan on increasing employee co-pays to help control costs
- 46% plan on offering HSA’s s to help control rising costs
Due to the constant changes of the ACA, and the lack of clarity due to final regulations still be worked on, many companies are taking a “wait-and-see” attitude when it comes to managing around the ACA requirements. There appears to be a mixed level of awareness and preparedness. The survey of HR professionals revealed that 40% of large companies indicate a high level of confidence that they understand employer obligations under the ACA. However, only 20% of small and midsized companies give the same indication. As we get further into 2014, it is expected that these numbers will rise as the employee mandate continues to roll out and the final “rules of the game” for the employer mandate become more widely known. As seen over the last few months, the regulations are constantly being amended and changed.
As final legislation becomes known and implemented, what should companies do?
- Learn as much as possible about the legislation’s potential impact
- Clearly comprehend the ACA’s legal requirements and time frames to ensure compliance
- Stay on top of the ever changing regulations
- Determine the additional administrative burden that will be placed upon your business
- Figure out the financial impact to your business and how you plan on working around it
- Develop an enrollment strategy with healthcare coverage stipulations to keep in compliance and control costs
- Help your employees work through their options
- Education is very important and mandated
- Execute those initiatives that are mandated and those to help manage costs and mitigate risk
ACA is very complex and probably the most taxing issue ever tackled in Human Resources. Although not expected, it has been confirmed to be constitutional and is the law of the land. As we head into 2014, more and more will become known about the law. This knowledge is required by large and small companies so they can make their best decisions and form their strategy. All businesses need to remain financially viable, but also must stay compliant and mitigate the risk of non- compliance. HR has seen challenges in the past, but none like the magnitude of the ACA.
For assistance with any or all of your human resource needs, HR Affiliates provides solutions that fit any company.