It’s 2015. The Employer Mandate is already in effect. There are some large obstacles up ahead. Have you taken the time to plan for the ACA and ensure you have the proper processes in place? There’s still time to act!
Luckily, Benefitfocus has partners like Equifax Workforce Solutions to help guide you through the turbulence ahead.
Reading the Water
Benefitfocus and Equifax Workforce Solutions hosted a webinar addressing the challenges and risks associated with ACA compliance and offered key strategies for success in the face of increasing regulatory complexity. We were excited to provide the market with an hour of discussion dedicated to empowering our audience with the knowledge they need to overcome the administrative challenges inherent in the ACA.
During a Q & A session in the webinar, we received a lot of questions asking how employees hired as variable-hour workers should be handled per ACA regulations. There are many complex rules involved, so confusion over best practices in this area is to be expected. Given that complexity, we thought it might be useful to address the issue in more detail here.
Determining Full-Time/Part-Time Status
As discussed in the webinar, there are two methodologies that can be used to determine whether an employee is full-time, and therefore eligible for employer sponsored health coverage, under the ACA. These include the monthly measurement method and the look-back measurement method.
If the monthly measurement method is employed, then full-time status is determined based on the hours of service the employee earns in each calendar month. There is considerable risk with this method, however, especially with variable-hour employees, because you may not realize that an employee is eligible for coverage for a particular month until it’s too late—leaving your organization open to fines. This method is often used for full-time employees, who have regular working hours, but it still requires a lot of administrative work and is not used as commonly as the look-back method.
If the look-back measurement method is employed, then full-time status during a future (stability) period is determined based on the hours of service in a prior (measurement) period. Most employers are using this method, because it carries relatively less risk for part-time and variable-hour employees.
Who Must Be Measured?
Per regulations, all employees must be measured and given one of the following designations:
- Full-time: reasonably expected to work at least 30 hours per week
- Variable: unclear at the time of hire whether the employee will work at least 30 hours per week
- Part-time: reasonably expected to work less than 30 hours per week
- Seasonal: hired to work for a period of less than six months
Why does this matter?
Sections 6055 and 6056 of the ACA require that employers report information around who was offered coverage, when it was offered, whether it was affordable and whether they accepted the coverage. All of this information must be aggregated across Payroll, Tax, HR and Benefits and reported annually to the government to avoid penalties.
Why brave the ACA alone when a more experienced guide can take the rudder for you?
The scenarios discussed here are only a small piece of the ACA puzzle. ACA regulations are complex and subject to change. If you are not 100% confident in your organization’s ability to face the challenges inherent in ACA compliance (aggregating data from Benefits, Payroll and HRIS systems; accounting for gaps in data; establishing a solid audit trail; automating processes, etc.), then you may find that outsourcing is an excellent option.
Benefitfocus and Equifax Workforce Solutions provide a suite of tools to support benefits administration and compliance. The interface between the Equifax ACA Management Platform and Benefitfocus helps to streamline eligibility management and put compliance processes on auto-pilot.
The Equifax ACA Management Platform provides tools to:
- Track ongoing measurement, administrative, and stability periods for each employee
- Provide reports and alerts for employees who are trending eligible or ineligible for coverage
- Assist in predicting employer healthcare costs by forecasting upcoming enrollment volume
- Manage IRS Reporting requirements
- Fulfill forms delivery to employees per the regulations
Hear more ACA-related insights from Equifax during the Benefitfocus One Place. 2015. conference in Orlando, FL March 9-11. Click here to register!