Breaking Bad News: How to Manage this Rough Task
One of the biggest challenges that all advisors face under the Affordable Care Act is telling clients something that they do not want to hear.
For example, an Applicable Large Employer currently has a management carve-out plan and they will need to open eligibility up to a large number of employees, which is sure to increase employer costs. Or perhaps an employer does not use a payroll system that tracks certain types of employees, but they now must do so in order to comply with the measurement, administrative and stability period tracking requirements of the law.
This can be a tough road to hoe for advisors but it is one we all must travel down at some point. How can we make this process smoother? It is actually not too complicated to simplify this issue.The answer is that the advisor needs to give the employer proactive steps in order for them to meet compliance. It is not enough for an advisor to simply tell the client that they are going to have an issue. They must also provide solutions. For example, it is not going to go over well if the conversation goes like this:
Advisor: Yes, Bill you are going to have a big problem because you are not tracking the hours and days worked by your seasonal workers. This is going to cause issues for you when you need to determine if you are an Applicable Large Employer and when you determine who you need to offer coverage to. So…. You should really do something about that. See you in a couple of months!
I can assure you that the client/advisor relationship is not going to be a healthy one after that conversation. However, if the advisor approached it in the following way, then maybe there would be a different outcome:
Advisor: Yes, you are going to have issues based on what I just explained however I have cultivated a relationship with a payroll provider and a company called SyncStream that we can set you up with to take care of these issues. Yes, it will cost some money to put these procedures into place, but not nearly as much as noncompliance will cost you. I will also be there along the way to help you determine your Applicable Large Employer status. If we manage your seasonal employees properly, then you may even be able to avoid some of these complex regulations. If not, then I will help you determine the best choices in regards to Measurement, Administrative and Stability Periods that will be most optimal for your company. Why don’t we get started on creating a comprehensive ACA compliance plan?
After this response the client will see an advisor that has just enhanced their value. This advisor is identifying the problem(s), educating the client on why there is a problem, and providing the solutions.
The Affordable Care Act has made it a ‘whole new ball game’ as the expression goes, and advisors must adapt their models to the new rules. Advisors that provide solutions, utilize practical tools, and can be adaptable will not only survive the Affordable Care Act, but prosper as well.