Employer’s Responsibilities Under the Affordable Care Act

Under the Affordable Care Act, and as part of the health care reform, small businesses will be offered new options for purchasing health care coverage, such as through the use of new public exchanges. These will provide a market place or a one stop shop, in which companies can compare a variety of plans, enter defined contributions and other selection data. The exchanges will then offer recommended plans which have been pre-approved as meeting new federal regulations. In addition, exchanges will also help to provide ongoing support to consumers and ultimately help business owners to provide health care coverage in ways which are cost effective. They also allow for employers to offer a selection of coverage options to their employees. Many exchanges will also provide administrative support, such as billing and invoicing. However, companies must also find ways to ensure that their internal software applications and benefit administrative processes are compliant with new federal regulations. For example, some businesses may be required to participate in new W2 reporting and may be required to offer summary benefit documentation to their employees, detailing the coverage offered. Moreover, companies may wish to ensure that their internal software solutions are compatible with external websites and links provided by insurance carriers.

Some companies may see an increase or decrease in costs based on the size of their company and the healthcare options available to them. For example, smaller companies will be eligible to participate in SHOP public exchange programs, and they may be eligible to receive tax credits to help contribute towards the costs of covering their employees. Conversely, some companies may see an increase in costs, particularly if under new regulations they are required to provide insurance when previously they had not.

To further reduce the costs associated with benefit administration, companies may choose to integrate multiple processes across departments using HR benefit modules which take advantage of cloud computing. Employers may also choose to work with consultant companies to help develop business strategies which streamline HR related processes. Moreover, HR departments must educate themselves on the changes which will occur over the coming years under the Affordable Care Act. This includes understanding the impact on their current health care coverage and ensuring that they remain compliant with new regulations. As companies with more than 50 workers will face penalties if they do not offer coverage, businesses will also be required to engage in greater analytic and tracking to monitor their number of staff. Companies therefore need to engage in strategic decision making, and integrative software solutions which incorporate analytic tools, may prove to be invaluable during this period of health care reform.

There are numerous new regulations occurring under the Affordable Care Act and these are often in addition to many current regulations. Employers and HR departments must therefore carry out comprehensive research to ensure that they are aware of their new responsibilities at both the federal and state level.

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