By USDR
The Affordable Care Act (ACA), or Obamacare, as it is commonly known, has been threatened to be repealed and replaced by the Republicans for several years, and this year alone, healthcare legislation has been tossed and turned around the White House causing confusion amongst employers and consumers.
The goal of Obamacare is to enable every individual in the U.S. to have healthcare coverage that is affordable and meets some minimum value requirements, including coverage of doctor’s services, inpatient and outpatient hospital care, and prescription drugs.
The Employer Mandate and Individual Mandate Effects Every American in the U.S.: A Quick Review
- The ACA requires every employer with 50 or more full-time equivalent employees to offer affordable, minimum essential healthcare coverage to their full-time employees for every month that they were of full-time status or pay a penalty.
- Employers are required to track and report their “offer of coverage” to their employees and file new tax forms to the IRS in the beginning of each year for the previous plan year.
- Individuals are required to have healthcare coverage, which can be purchased as a group plan (from their employer) or from the federal health insurance marketplace or pay a penalty.
- Like employers, individuals are required to report that they (and their dependents) had healthcare coverage on their tax forms to the IRS.
Employers and individuals alike struggled to get through the first year of ACA reporting, in 2015, but with the evolution of sophisticated ACA compliance and reporting technology and IRS deadline extensions, 2017 ACA reporting has gone much smoother.
Trump’s campaign promised to repeal and replace Obamacare, immediately, when he was sworn in as President caused nationwide concern over how Trump’s healthcare legislation would impact Americans.
Individuals questioned if they were still required to have health insurance, and employers were concerned with what reporting requirements, if any, they would have to comply with.
Today: Obamacare Remains
After several name changes, Trump’s repeal and replace Obamacare plan did not turn out.
The Republican’s American Health Care Act narrowly passed the House on May 4, and went on to the Senate to undergo several more revisions.
All attempts at passing new healthcare legislation included removing the Employer and Individual Mandates; however, the last revision, the “skinny repeal” bill, failed to pass the Senate on July 28, which means that after nearly seven months of uncertainty about the state of the healthcare system, nothing has changed.
Easy ACA Compliance
Employers understand that a benefits administration system with integrated online enrollment and ACA tools make it easy for their employees to enroll in their benefits and performs the ACA tracking and reporting automatically. This is especially important for employers with 250 or more employees who are required to electronically file their tax forms with the IRS.
Last year, many employers underwent rigorous and time-intensive data aggregation and strived to complete the coding required to populate lines 14, 15, and 16 on the 1094 and 1095 tax forms or used “off-the-shelf” ACA reporting applications only to find out they did not have the required TCC code to E-file with the IRS. This caused many employers to miss the deadlines the IRS set forth for completing the ACA reporting requirements. Thankfully, considering the struggles and confusion employers experienced—not to mention the time and money spent on administration and applications—the IRS offered some relief from penalties with the good faith effort and extended the reporting deadlines.
That said, the IRS’s E-filing system has been tuned up, and federal legislators are expecting employers to be familiar with how to complete and file their 1094 and 1095 forms. Deadlines extensions and good faith penalty relief are not anticipated for 2018.
Many employers are gearing up for this year’s open enrollment for their employees to enroll in benefits and may be renewing contracts with carriers or evaluating other medical plans with other carriers. When evaluating medical plans, employers must ensure they meet the minimum essential coverage that is required to remain in compliance with the ACA. ACA reporting and planning a benefits program go hand-in-hand as employers must also understand how they are going to have employees enroll in benefits, monitor and track their full-time workforce, and ensure their variable hours’ workforce is offered health coverage once becoming full-time.
Online enrollment and benefits administration technology now plays an essential role in Human Capital Management and the HR technology industry is booming. Understanding that the data needed to populate ACA tax forms is housed in benefits administration technology solutions, employers are keen to implement an effective system that automates and facilitates many HR functions. Lessons learned from years past motivate employers to avoid purchasing enrollment technology or ACA applications that do not optimize benefits administration or integrate with carriers or payroll—which automates data exchange and maintains data integrity. There are several key attributes employers must consider when implementing solutions to play the role of benefits administration and ACA reporting.
Employers – here is your 2018 Benefits Enrollment and ACA Compliance 7-Tip Toolkit:
- Benefits administration technology must be able to accommodate your complex or simple benefits program, including multiple carriers, plans, employee classifications, locations, and more. This is critical for the customization of your benefits program, online enrollment, and managing employee eligibility. Many applications are not mature enough to handle complex benefits logic or control what individual employees are able to enroll in.
- Benefits administration technology must be capable of connecting with carriers and payroll to perform electronic data interchange (EDI). This reduces administrative work, ensures accurate payroll processing, and ensures employees receive their benefits. Without the ability to connect to third party systems, employers must track and report every benefit change to their carriers and payroll system—an enormous data and time intensive process, as well as inefficient and costly.
- Benefits administration technology must include online enrollment and a benefits communication interface for employees to learn about their benefits, download forms, receive decision support, easily enroll in their benefits, and access a complete benefits confirmation statement (BCS)—at any time.
- Benefits administration technology must include an integrated ACA compliance and reporting tool and COBRA tracking—and it must be capable of variable hours tracking and E-filing with the IRS to ensure full compliance with the ACA. Other ACA applications require employers to manually extract data from the system or E-filing with the IRS is not supported.
- Benefits administration technology must be flexible and house a dynamic database of employee records that include all employee benefits transactions, HR administrator transactions, documents, communication logs, and the ability to send batch or single emails to specific employees. It is important that the benefits administration system facilitates real-time data so that as employees enroll or make benefits changes, HR administrators are updated immediately.
- Benefits administration technology must include a reporting module that enables HR administrators to create and save custom reports. Every employer is unique and requires different benefits reports to express information such as employee participation, total employee premiums by individual employee, total employer premium, employees who have not enrolled during open enrollment, or a financial summary by product. In addition, billing reports must be able to be generated to simplify carrier billing.
- Benefits administration technology must be delivered with a high-level of expert service and customer support. Given that many services, today, are offered online and through mobile apps, the value of customer service has seemed to diminish. A benefits administration technology provider must offer employers a dedicated contact via phone call or email, ongoing training and assistance, quick response to inquiries, and overall benefits program optimization through customization and recommendations. When the data, activities, and compliance requirements are housed, automated, or facilitated by a system have such a critical nature, the provider delivering that system must have a high-level of expertise and personal interactions with the customer.
While the status of Obamacare and healthcare legislation kept the nation on edge during the first part of the year, Obamacare—the ACA—has been confirmed to remain in place. There is no more uncertainty regarding whether employers will be required to complete and file 1094 and 1095 tax forms in 2018. When implementing a flexible, integrated, intelligent employee benefits system, employers can remove their uncertainty of whether they are in compliance with healthcare legislation, now and in the future.
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Jessica Lynn Campbell is Marketing Executive and Technical Writer for Web Benefits Design. She has a Master’s in English-Technical Communication, a Bachelor’s in Psychology, and is currently obtaining a PH.D in Texts and Technology. Jessica is an expert and experienced technical communicator, author, and multi-media manager having been published on multiple media platforms including print and online. Jessica can be reached at jessica.campbell@wbdcorp.com or 407-810-7542.
Web Benefits Design is a leading national employee benefits technology firm who develops a complete, cloud-based employee enrollment and Human Resources administration system. Web Benefits Design’s unique proprietary system integrates technology, administration, compliance, and communications into a single source employee benefits administration solution.
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