Editor’s note: This article is one of a weekly series of four articles on the Affordable Care Act.
If we take the position that the Affordable Care Act (ACA) is here to stay, we must then ask ourselves if we have the necessary tools, knowledge, and support to successfully comply with the law and to aggressively manage an evolving cost center. In other words, where do we go from here?
With the introduction of the Affordable Care Act on March 23, 2010, the American health care system as we knew it was changed forever. No matter your excitement for, or aversion to this legislation, most agree that this is one of the largest changes to U.S. health care coverage since the introduction of Medicare in 1965.
If your company is similar to many in the industry, employee counts are similar to the children’s game “duck, duck, goose.” With IRS Code 6055 and 6056, this turnover means that you must now verify and report that your employees are covered and receiving the 63 ACA required minimum essential coverages (one of several ACA provisions) if they are full-time employees. Fail to comply and you can be hit with a penalty up to $1.5 million for unintentional “failure to comply” and no maximum for “intentional failure”.
With the average hotel owner enduring turnover rates as high as 50% annually, this means that hour calculations mandated under the ACA can potentially be a logistical nightmare. In today’s world, many hospitality industry executives have already cut overhead as much as feasibly possible and are already operating fixed cost administrative functions on a bare bones basis.
What many hotel executives don’t know, is that there are ways that you can actually receive assistance from your health plan administrator to satisfy many of the ACA reporting requirements. The recommendation is to partner with an organization that understands your specific needs and vision and has the platform to tailor your plan to the most appropriate benefits offering. There are a variety of products that can be used to count your FTEs and electronically file your results and your partner should be able to provide assistance in the management of this process.
Additionally, human resource personnel must now also consider regulations surrounding the rules added by the ACA to the Fair Labor Standards Act. Regardless of how efficient your human resources department operates, this can create nightmares from a paperwork standpoint for them.
For the bigger health care spenders out there, your HR teams should also start thinking about the excise tax on high-cost benefit plans, which take effect in 2018. The “Cadillac Tax” is a 40% non-deductible excise tax for plans that exceed $10,200 for individuals and $27,500 for families. We also recommend paying attention to ACA “auto enrollment” legislation, which would require employers with more than 200 employees to automatically enroll full-time employees for coverage. Currently, our employees choose to opt into our health plans, but the legislation would require them to opt-out, which would significantly drive plan participation whether or not the employee actually wanted the plan. Further guidance on this law is pending from the Department of Labor so the legislation is on hold.
—Fred W. Malek
Fred Malek is the CEO of Hospitality Benefits LLC, a health care market place exclusively built for the hospitality sector.
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