3 observations about the ACA from SHRM18
“I just received a $3 million penalty from the IRS for noncompliance with the Affordable Care Act.”
That’s just one of many similar, eye-opening statements we heard last month at SHRM18, the Society for Human Resource Management’s annual conference.
While health benefits are just one facet of HR covered at SHRM, the reality of million dollar noncompliance penalties put health care in the spotlight and had lots of people talking.
We had a booth in the exhibit hall where human resources professionals, experts, and vendors convene, and we heard firsthand about the trends and challenges that are keeping HR up at night. Here are the three prevailing messages about the Affordable Care Act (ACA) we heard in our conversations with dozens of HR professionals at SHRM18:
- Confusion remains about the employer mandate. We’ve witnessed this at other conferences this year, but we weren’t any less surprised to hear how many HR professionals still think the ACA’s employer mandate went away, and have stopped reporting as a result. In reality, the repeal of the ACA’s individual mandate in December 2017 had no impact on the employer mandate, which is very much still in place along with its reporting requirements.
In fact, adhering to ACA regulations is more critical than ever as ALEs begin to experience the repercussions of ACA noncompliance. Case in point: the individual we overheard discussing a $3 million penalty letter her company received for failing to offer coverage to all full-time employees in 2015.
This company is not the only one. Thousands of applicable large employers across the U.S. are being assigned costly penalties for not complying with the mandate, and the IRS shows no signs of slowing down.
- Employers are still handling complex ACA reporting on their own. Despite the many technologies, payroll companies, and HR firms that specialize in ACA compliance, many employers are still manually tracking and recording company and employee data on their own.
After three years of ACA filing, some companies are very comfortable with the health care regulation. However, many employers don’t understand the cost differential between leveraging a solution or existing partnership and having a team on their payroll responsible for reporting. For example, a medium-sized business with about 500 employees would save at least $20,000 per year by utilizing an ACA reporting solution or working with a partner that specializes in ACA compliance.
Cost isn’t the only benefit of turning to experts for ACA compliance. Time savings can also be significant. Many employers don’t realize how much manpower it takes to manually and accurately track all employees and their health care offers.
Working with an expert partner also lessens the room for error. No matter how comfortable an employer may be with the law, there’s something to be said for utilizing the expertise of a trusted partner who lives and breathes the ACA day in and day out.
- Even legal experts struggle to understand the ACA. More than in past years, we saw many vendors providing HR-specific legal counsel. HR professionals and employers can go to these companies for compliance advice and guidance on regulations. However, in speaking with these vendors, we learned that even many of them were unclear about the status of the ACA employer mandate--very concerning given that employers are relying on these companies to guide them toward compliance.
The ACA has fought off countless attempts at repeal over the past year and a half, and no doubt has seen its fair share of changes. But the employer mandate is still very much intact and the implications of noncompliance are coming to fruition.
If there’s one lesson we hope SHRM attendees walked away with it’s that their employer obligations under the ACA cannot be ignored or wished away. If you’re one of these employers or HR professionals that hasn’t been reporting, speak with a trusted advisor to learn how you can prepare for the future and avoid damaging penalties.