At first glance the expectations tied to the Affordable Care Act (ACA) can seem well-defined. The “rule of 95”, after all, dictates that all appropriate companies must provide coverage to 95 percent of all applicable employees and that this coverage must meet the minimum federal requirements.
Depending on the size of your company, this can be a rather large number, but the rule of 95 helps define your expectations, right?
Now, here’s where it gets complicated. Many employers have other aspects of their business that can make their ability to comply with this metric and the overall ACA very difficult. A company may have a large number of variable-hour staff. Their employee population may be spread out among multiple commonly owned companies or they may have multi-state employees or retirees or Board of Director considerations.
If this resonates with your business, you fit the description of a complex employer. While this makes your goal of ACA compliance more difficult, the expectation of that compliance remains steadfast.
Managing complex employer problems
While managing ACA compliance can be tricky for complex employers for myriad reasons, we commonly see a few scenarios appear over and over again. This includes the following:
1. Managing multiple Applicable Large Employer (ALE) members on an individual level
The challenge of adhering to the rule of 95 becomes even more difficult when multiple ALEs are involved. Why? Because adhering to the rule for your entire company is not enough. Each individual ALE must meet this requirement, or your company can fall out of compliance and be subsequently fined.
However, many companies lack vision into the exact compliance rates of each of their ALEs. Instead the data often arrives in a single conglomerate. This makes the failure to notice oversights in coverage offerings for a particular ALE all the more probable.
2. Keeping up with ongoing mergers and acquisitions activity
When an acquisition takes place, the finance department is usually well aware of any outstanding debts held by the newly acquired company. The HR department, however, often is not brought up to speed on the purchased company’s ACA compliance history. That’s a big deal because ACA penalties can be assessed retroactively, and a company that has been out of compliance for months or even years can leave your company responsible for its considerable fines.
The merger could also mean one or both of the companies — which had been too small to worry about ACA compliance in the past — is now large enough to necessitate adherence to the rule of 95. This predictably introduces a learning curve that must be mastered quickly.
3. Handling non-employee populations
Managing ACA compliance as it pertains to your company’s existing employees can be a struggle in itself. However, when compliance requirements are added for retirees, COBRA enrollees and other non-employee populations, the challenges grow exponentially.
Yet while these groups don’t grace the halls of your company every single day, your compliance commitments are no less important. Miss an offer of coverage and you’ll put your company at risk for fines, just as you would with any other employee group. This means it pays to watch out for these groups even if you don’t see them every single day.
Solving your complex employer challenges
The compliance challenges presented here are three of the most common that complex employers face. They are, however, by no means the only challenges.
That’s why we created our latest eBook, “Solving Employer Shared Mandate Responsibility Concerns for Complex Employers.” This document is full of strategies for conquering these compliance concerns as well as other common issues. You can download it here, and remember, if you ever have a question about how to better manage your ACA compliance, Health e(fx) is always here to help.
June 26, 2019