Amid the hustle of running your business, don’t lose sight of the fact that the requirements of the Affordable Care Act (ACA) are no longer on the distant horizon. They’re here, or will be shortly. Employers are feeling the heat of complying with the new law, and given its complexity, there are bound to be plenty of potential pitfalls. Local experts share five, and how to avoid them:
1. You assume your small business is exempt from the mandate to offer workers health insurance.
Owners of small businesses might think the so-called “employer mandate” doesn’t apply to them. But look out if you’re a common owner of more than one business. Chris Ferruso, legislative director of the National Federation of Independent Business-Ohio, offers the following hypothetical example: You own a manufacturing company that doesn’t employ the equivalent of 50 full-time workers, the threshold that triggers the mandate. But you also own some real estate, and you have workers managing that portfolio. Together, those two businesses might push you over the employer-mandate threshold.
2. Our company has finished planning for the ACA and has moved on.
With so many ACA deadlines pushed back in recent months, such an approach might not be prudent. For example, small businesses learned in November that they might be able to keep coverage, set to become noncompliant in 2014, well into 2015. The trick is renewing their plan at the right time, said Doug Anderson, a member of Bailey Cavalieri LLC. He recommends that small businesses wanting to go that route renew their noncompliant coverage before Oct. 1, 2014.
3. With the delay of the employer mandate, I have plenty of time to figure out how to deal with benefits.
Not so, said Richard Mason, director of government affairs for the Ohio Restaurant Association. Employers should now be adjusting workers’ schedules, since that distribution likely will dictate how much liability the company will face when the mandate begins in 2015. For example, Mason said, dividing 60 hours of work among two people (30 hours each) could bring greater penalties than dividing those hours among three workers (20 hours each). “If it was just a matter of doing the math and figuring out the least expensive way to do it, that’d be one thing,” Mason said. “But it’s not. These are human beings.”
4. Relying entirely on your HR department to plan long-range benefits strategies and ACA compliance.
In some cases, this can be a mistake, particularly if you’re considering significant benefits changes. Often it’s important for a high-level executive to take an active role in charting a course, said Jolie Havens, a partner with Vorys, Sater, Seymour and Pease LLP. “There are so many ways to misstep if you’re not methodically going through this and thinking through each piece at each juncture,” she said.
5. Forgetting that communication with employees cuts both ways.
Employers typically need data and analysis to balance their responsibility with an employee’s responsibility in paying for health-care benefits. Employers might have to penalize workers who aren’t doing enough to avoid costly chronic health conditions. And they might have to collect some data they traditionally haven’t sought from employees, such as household income. Otherwise, “how is an employer going to know that they’re going to have a $3,000 penalty” for certain employees under the ACA, said Ken Weixel, a Columbus-based partner with the health-care practice at Deloitte and Touche. Employers need to emphasize to workers the value that they’re receiving through their health benefits so they don’t take them for granted, he said.
Ben Sutherly is a reporter for The Columbus Dispatch.