Benefits Administration under the Affordable Care act
Under the Affordable Care Act, many companies are seeing a number of changes to the types of health care coverage they must offer their staff, including how they offer coverage. As a result, many employers are engaging in a comprehensive analysis of the health care reform, its impact on their company, their new options for providing health care coverage, and the effects the reform may have on other company processes. Employers may begin to redesign their current benefit options to ensure that these are compliant with both federal and state regulations and are ready for the implementation phase in 2014. However, as the reform will also introduce new regulations over the coming years, employers must also continue to engage in forward planning and continuous analysis to monitor additional impacts on their company. Questions employers are considering include “who is eligible for coverage?” and “what types of plans are considered to be minimum and essential?” Companies must also decide if they can afford to continue to provide coverage and what would the penalty costs be for companies who choose not to do so.
The Affordable Care Act will not only impact benefit administration, but it will also impact many other aspects of the company. For example, the number of employees a company has will affect their eligibility for federal support and their responsibilities to provide coverage. It may therefore influence the company’s recruitment decisions. For example, small businesses will have access to public exchanges and tax credits. New costs to provide health care coverage may need to be considered in budgetary and salary planning. Companies will also be required to engage in new reporting processes, such as reporting the number of employees, types of plans offered to prove compliance with federal regulations. The ability for employers to collate and analyze company data will therefore be integral to help monitor compliance and to also engage in strategic business planning.
Employers will also be required to analyze their communication strategies, such as how they disseminate health coverage information to their employees. They will be required to offer a Summary of benefits and coverage document to all staff, which clearly outlines the plans offered by their employer and other benefit options such as public exchanges. Employers may also consider how they will inform employees regarding other changes under the health care reform. These may include offering information regarding the expanded eligibility requirements under Medicaid, changes to the Flexible Spending account (FSA) limit, and the ability for dependents to remain on their parent’s health care plans up until the age of 26.
Employers may find that there is an increase in the cost of premiums due to the number of employees who will now be eligible for health care coverage. Under the reform, full time employees will now be defined as those working 30 hours or more. There will also be costs associated with penalties for businesses who do not offer health care coverage including other direct and in-direct costs. Although a period of uncertainty, with effective planning and appropriate technologies, companies can ensure that they have the processes in place to support the changes taking place under the Affordable Care Act.