Using HR Technology for ACA Compliance and Healthcare Reform

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Healthcare Reform and Technology

PPACA and HR TechnologyAre you ready?
Are you able to manage all of the administrative requirements set forth by the affordable Care Act (ACA)? Group Services can help you determine if your systems are configured and compliant.  Contact a Group Services certified Healthcare Reform Specialist today.


Employer Shared Responsibility 1/1/2014:

Employers with 50 or more full-time employees (including full-time equivalent employees) must offer affordable coverage. Employers must offer traditional plans to all full-time employees (and their dependents) that provide minimum value (at least 60% actuarial value), with the employee cost for single coverage capped at 9½ % of employee income (or Box 1 W-2 wages).

How Technology can help:

  • Conduct analysis of employees purchasing benefits to see if costs exceed 9.5% of W-2 wages.
  • Aids compliance
  • Helps mitigate risk related to cost of benefits
  • Helps reduce administrative burden

Automatic Enrollment & Non-Discrimination Rule 2013/14 Pending Guidance:

Employers with 200+ full-time employees must automatically enroll new employees in the employer’s group health plan. Insured employer group plans may not discriminate in favor of highly compensated employees.

How Technology can help:

  • Systems can automatically enroll new hires
  • Report exceptions
  • Aiding compliance with automatic enrollment and non-discrimination requirements.
  • Helps reduce administrative burden.

Form W-2 Reporting 1/1/2013:

Employers issuing 250 or more W-2’s for the calendar year 2011 must include value of group health coverage on the employees W-2 form for 2012. (i.e., Form W-2’s distributed January 2013). Employers must also confirm that this figure is printed on the W-2. One entry will show both Employee and Employer cost.

How Technology can help:

  • Systems can be configured to track both the employee and employer contribution and provide a single report.
  • Systems can produce this figure on the W-2.
  • Aids compliance with W-2 requirements.
  • Reduces penalty ($100 per W-2).
  • Helps reduce the administrative burden.
  • Employees Leverage Employee Self Service.

Determining Full-time and Part-time status 2014:

Beginning in 2013 this provision will allow employers to use all or part of calendar year 2013 as a “measuring period” to identify full-time employees for purposes of a “stability period” covering all or part of 2014, and there-by approximate their costs, in 2014, were they to “pay” excise taxes or “play” by offering those full-time employees group health coverage that is both “adequate” and “affordable” as defined under the assuming. We are assuming the group will use a 12 month look-back period for health reform purposes to determine full-time status for benefit eligibility.

How Technology can help:

  • Some technology solutions have already configured this requirement and have reporting available.
  • Systems can be configured to track hours worked and the look back.
  • You will have a tracking method.
  • Helps reduce administrative burden.

Wellness Incentives 1/1/2014:

For plan years beginning on or after 1/1/2014, permit-ted wellness incentives increase from 20% of the cost of coverage to 30% (50% if the wellness program is established for the purpose of tobacco use prevention reduction).

How Technology can help:

  • Link to wellness portal for integration.
  • Imbed enrollment of wellness plan into the benefits administration process
  • Reduces employers cost of healthcare.
  • Aids compliance.

Employee Notice of Exchange (Recently Postponed) 2013:

Employers must provide current employees with a notice describing availability of exchange coverage. The notice must be provided to new hires after 3/1/13. (Effective date delayed until late summer/fall to coordinate with open enrollment period for Exchange coverage.)

How Technology can help:

  • Systems can be configured to make this part of the on-boarding process with an employee acknowledgement.
  • This can be incorporated into the benefits administration process on most systems.
  • Aiding compliance with exchange notice requirements.
  • Helps reduce administrative burden
  • Employees leverage Employee Self Service.

Annual Dollar Limits and Waiting Periods/Pre-Ex Exclusions 1/1/2014:

For plan years beginning on or after 1/1/2014, employer group insurance plans may not impose annual dollar limits on essential health benefits, waiting periods of longer than 90 days, or pre-existing condition exclusions.

How Technology can help:

  • Systems can track leaves for eligibility.
  • Provide new hire reports (up to 90 days to validate employment status (part/full-time, on leave of absence) and change triggers to ensure benefits enrollment.
  • Helps mitigate excessive, erroneous cost based on employment status.
  • Aids compliance with FLSA rules.

Medicare Tax on Wages and Unearned Income 1/1/2013:

Medicare tax on wages increases by 0.9. Applies to those earning $200,000 if single, $250,000 if married filing jointly, and $125,000 if married filing separately. However, employers must withhold on all amounts over $200,000, regardless of employee’s filing status.

How Technology can help:

  • Systems can analyze payroll and deductions for high income employees who may meet criteria for new taxes.
  • Aids compliance

Flexible Spending Account (FSA) Annual Limit 1/1/2013:

For plan years on or after 1/1/13 a $2,500 limit applies to employee healthcare FSA contributions.

How Technology can help:

  • Systems can deliver communication to employees on this limit.
  • Cap the limit while the employee is enrolling.
  • Aids compliance for FSA limit.
  • Boosts employee engagement and communication

Summary of Benefits and Coverage (SBC):

Employers must provide SBC’s for annual enrollment beginning on or after 9/23/12.

How Technology can help:

  • Distribute SBC’s through employee self-service portal.
  • Employee must acknowledge receipt, so employer has tracking ability.
  • Aids compliance with SBC requirements
  • Helps reduce administrative burden
  • Empowers Employees with access to coverage related information.

Dependent Coverage:

Employers must expand coverage for qualifying dependent children up to age 26.

How Technology can help:

  • Systems can be configured to apply the age rules
  • Reduces cost associated with ineligible plan participants.
  • Helps ensure compliance.

Medical Loss Ratio (MLR) Rebates:

Employers must have procedures in place to distribute MLR rebate dollars to eligible individuals, or spend the rebate on improving effectiveness of their health & welfare plans.

How Technology can help:

  • Assist in calculating rebate distribution to eligible individuals as a percentage of plan contribution.
  • Helps reduce administrative burden
  • Helps ensure compliance.

Benefit Technology Resources - HR TechnologyContact Group Services today to learn how HR Technology can benefit your organization.  Whether you need a review of your existing HR technology configuration to ensure compliance with health care reform, an analysis of your current HR technologies and workflows to ascertain efficiencies and gaps to maximize existing products, or assistance with selecting the right HR technology for payroll, time keeping, HRIS, benefits administration, performance management, recruitment/applicant tracking, and onboarding, Group Services can help.