Healthcare Reform: A Practical and Strategic Look at the Impact


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These slides cover the information below. You can also view the live recording of this video here:

- What we know today about healthcare reform
- Healthcare reform's impact on payroll, HR, and benefits
- Notice of Exchanges
- Updated COBRA notice
- Employer mandates
- Wage and hour update
- Areas of focus for 2013 and beyond

Published in: Business, News & Politics
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  • Additional Medicare taxes Medicare tax on unearned income
  • FT=30 hours per week Term business days is not clear
  • Seasonal worker exception: an employer having a large number of seasonal employees might be able to avoid the “large employer” label, and thus the play or pay rules, even if its average full-time workforce exceeded 50 over the course of the entire year. This exception applies if, during the prior calendar year, (1) an employer’s full-time employee workforce (including FTEs) exceeded 50 employees on only 120 or fewer days, and (2) seasonal workers were the only reason the 50-employee threshold was exceeded during this period. This exception may also be applied on the basis of 4 or fewer calendar months .
  • Reminders to flag measurement period, admin, stability periods
  • More employers link premiums to wellness Aon/Hewitt Study: 83 percent of employers offer their workers incentives for participating in wellness-improvement programs, including filling out a health-risk assessment and undergoing biometric screenings.
  • Healthcare Reform: A Practical and Strategic Look at the Impact

    1. 1. Hot Topics in Employment Law Healthcare Reform: A Practical and Strategic Look at the Impact
    2. 2. $76M in revenue in 2012 6,776 public and private sector clients 7,364 individual clients 153,882 square feet to serve clients 400+ total personnel 71 partners 1 collaborative and positive culture About Sikich » Multi-disciplinary: An accounting, advisory, investment banking, technology and managed services firm with clients in the U.S. and internationally. » Excellent reputation: With a reputation for professional excellence, Sikich provides unsurpassed client service as well as timely and cost effective services. » Strong talent: We employ more than 400 talented people including 71 partners, all of whom devote their careers to a focused area. » Award winning: Accounting Today ranks the Firm 40th nationally among the top 100 accounting firms and 12th in the top 100 VARs.
    3. 3. Honors & Recognitions Accounting » #40 in Accounting Today’s 2013 Top 100 Accounting Firms » INSIDE Public Accounting’s Top 50 Accounting Firms in 2012 » INSIDE Public Accounting’s All-Star Firms in 2012 Technology » Top 1% of all ERP solution partners in the world » 2012 Microsoft Dynamics Inner Circle » 2012 Microsoft Dynamics President's Club » #12 on Accounting Today's Top 100 VARs in 2012 » #13 on Bob Scott's Top 100 VAR List for 2012
    4. 4. Tracing Our Roots 19821982 Sikich Gardner & Co. was formed; takes up residence in Aurora and Springfield 19981998 Merges with Intelligent Computer Solutions LLC and starts its technology practice 20122012 30th Anniversary 4
    5. 5. Sikich Service Lines Securities are offered through Sikich Corporate Finance LLC, a registered broker dealer with the Securities Exchange Commission and a member of FINRA/SIPC. Advisory services offered through Sikich Financial, a Registered Investment Advisor. General securities offered through Triad Advisors, Member FINRA/SIPC. Accounting, Audit & Tax Financial Reporting Employee Benefit Plan Audit Accounting Services Tax Planning Advisory Business Valuation Dispute Advisory Financial Advisory Flex-Staff Solutions Human Resources Marketing & Public Relations Supply Chain Investment Banking Acquisitions Advisory Sales Advisory Capital Raises Strategic Advisory Technology Accounting & ERP Software CRM Software IT Infrastructure Cloud & Hosting Solutions Strategic IT Planning Communication & Collaboration IT Consulting Managed Services Outsourced Accounting Managed IT Outsourced Human Resources Outsourced Marketing & Public Relations
    6. 6. Industry Expertise, Tailored Approach » Agriculture » Manufacturing & Distribution » Construction » Professional Services » Real Estate » Retail » Government » Non Profit » Healthcare » Higher Education Deep industry experience and longevity. Cross sectional teams with a depth and breadth of experience to handle the complete solution. Solution centric and product agnostic.
    7. 7. Healthcare Reform: A Practical and Strategic Look at the Impact
    8. 8. What Do We Know Today? • Healthcare reform is here to stay • Healthcare reform is very confusing • Guidance is coming out regularly, but there are still many unknowns • Administrative burden will likely be very significant
    9. 9. Healthcare Reform’s Impact on Payroll/HR/Benefits HR/Benefits Payroll
    10. 10. A Practical Look at Healthcare Reform: What’s on My To-Do List?
    11. 11. Notice of Exchanges • Must be provided to current and all newly hired employees starting no later than October 1, 2013. • Must inform employees of the following: • The existence of the government-run health care exchanges including a description of the services provided and instructions for contacting an exchange to request assistance. • If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of the costs, employees may be eligible for a premium tax credit if they purchase a qualified health plan through an exchange. • If employees purchase a qualified health plan through an exchange, they may lose the employer contribution (if any) to any health benefits plan the employer offers. All or a portion of this contribution may be excluded from income for federal income tax purposes.
    12. 12. Updated COBRA Notice • COBRA Model Election Notice revised to inform qualified beneficiaries of coverage options available through government run health care exchanges under PPACA • Employers will now give employees the option of choosing COBRA or going to Exchanges • The updated Model notice can be found here:
    13. 13. Who is a Large Employer? • Employed 50 full-time employees on business days in the preceding calendar year • Add up total number of hours worked in a month by part-time employees, divide by 120 and add to full-time employees • Add up number of employees for each of the 12 months and divide by 12 – if greater than 50, then you are considered a large employer for the current year • Transition relief is provided for the 2014 calendar year – employer may choose a six-month period in 2013 only
    14. 14. Who is a Large Employer? • Seasonal/variable worker exception: • (1) an employer’s full-time employee workforce (including FTEs) exceeded 50 employees on only 120 or fewer days, and • (2) seasonal workers were the only reason the 50-employee threshold was exceeded during this period. This exception may also be applied on the basis of 4 or fewer calendar months.
    15. 15. Who is a Full-time Employee? • Under healthcare reform and for determining the penalties, full-time is defined as 30 hours per week or 130 hours per month • More clarity may be needed when an employee is hired regarding employment status • Full-time • Part-time • Variable/Seasonal • Organizations will have to closely monitor those hired to work less than 30 hours
    16. 16. Employer Mandates • Employers (with 50 or more full-time/full-time equivalents) must: • Offer minimum essential coverage to at least 95% of full-time employees and children under age 26 OR • Pay $2,000 penalty per year per full time employee (minus up to 30 full-time employees)
    17. 17. Employer Mandates • If an employer offered coverage and it is not both: • Qualifying – offers minimum actuarial value of 60% • Affordable – doesn’t cost employee more than 9.5% of income • Employer pays $3,000 per year, per employee who: • Doesn’t receive qualifying and affordable coverage AND • Is not enrolled in minimum essential coverage AND • Obtains insurance from the exchanges AND • Obtains a subsidy
    18. 18. To “Play” or Not to “Play”? • If your organization decides to “pay” the penalty: • Penalties are not tax deductible • Reporting requirements still exist • Determining exact numbers of employees can be difficult • Not offering benefits may affect recruitment and retention
    19. 19. Seasonal/Variable Employees • Track hours over measurement period – 3 to 12 months • Get things in order during brief administrative period • Offer coverage to those emerging with at least 30 hours per week in a stability period
    20. 20. The Payroll Perspective • Each system is different and has varying capabilities • Think about what you will need your system to do going forward • Work with your current payroll system to make changes for tracking and reporting • Begin thinking about process to deal with administrative burdens
    21. 21. Questions to be Asking • How will my payroll system handle: • Tracking of hire dates (multiple hire dates, rehires) • Tracking of unpaid absences • Documentation of employment status • Reporting of hours worked • Full-time equivalents • Managing hours worked • Tracking of measurement periods and stability periods • Automatic enrollment
    22. 22. Questions to be Asking • What is the actuarial value of my current plan? • Is my plan affordable under the affordable care act? • What are my options to minimize the cost to my organization?
    23. 23. A Strategic Look at Healthcare Reform
    24. 24. A Strategic Look at Benefits • How do your benefits factor in to your total rewards package? • How are your benefits used to attract/retain top talent? • How do your benefits compare to the competition? • How will benefit changes impact your total rewards/compensation? • Do your employees understand the full value of the benefits you are providing?
    25. 25. Planning/Workforce Analysis • Staffing concerns – now and in the future • Managing hours worked, particularly with part-time staff • Impact of changes to work hours
    26. 26. Administrative Concerns • How will your organization determine measurement periods, administrative periods and stability periods? • How will your organization track hours to determine eligibility for part-time/variable employees? • Who will be responsible for handling the additional administrative responsibilities? • Tracking hours/reporting requirements • Enrollments • Questions
    27. 27. Communication with Employees • Ensure compliance with the various notifications and reporting requirements • Be able to communicate with employees about the various options available • Make employees better consumers • Help them understand how to get the most from their benefits • Be prepared to answer questions • Your organization’s benefit plans • Exchanges
    28. 28. Managing Rising Costs/Focus on Wellness • Promotes healthier lifestyles • Helps recognize potential medical concerns earlier • Keeps premium costs down
    29. 29. Your Focus: 2013 and Beyond • Work with a trusted advisor • Analyze workforce – today and in the future • Determine measurement periods • Consider plan design changes • Make sure payroll systems are set up properly to handle the additional administrative burdens • Ensure compliance with various notifications and reporting requirements • Focus on employee communications • Value of the benefits provided • How to get the most from benefits • Focus on wellness • Healthier lifestyles = reduced costs • Stay flexible
    30. 30. LinkedIn: Facebook: Twitter: Blog: Jennifer Lollino Vice President HR Consulting Services 630.566.8483 Joyce Grenis Senior Vice President HR Consulting Services 630.566.8454 Questions?