ACA Readiness – Can your existing systems get you started?
According to today’s Bloomberg article on the March US Job report: “Some companies are struggling to make do with fewer workers… Employers boosted hours to meet demand. The average work week for all employees increased to 34.6 hours.” Per the Affordable Care Act (ACA), as of January 1, 2014 these workers are all considered ‘Full-time equivalent employees’ and will be eligible for healthcare coverage.
By now the ACA has likely caused concern amongst your HR and Finance teams. At best, you have been proactive and spent time and resources learning about the new regulations and preparing for the imminent changes. Or, like many organizations, you may still feel completely in the dark and unsure of how to begin taking steps in the right direction. One thing to realize is that complying with ACA involves more than providing affordable healthcare coverage, and will have an impact beyond just your HR department.
Fortunately, for those companies that have automated time and attendance, HR, payroll or scheduling solutions in place, there are things you can do today to begin your compliance efforts in preparation for January 1, 2014.
Do your current systems give you the necessary visibility to determine which employees are full-time or part time? One of the first things you must determine is which employees are eligible for coverage using the “look-back” period (a 3-12 month timeframe to determine which part-time employees should be reclassified as full-time). Organizations must then provide coverage for those eligible employees.
Monitoring Workforce Schedules
Can you proactively manage labor hours to influence benefits eligibility and control costs? See current hours and projected schedules to arm managers with the information they need to control hours, and enable them to make scheduling changes easily.
Strategies for addressing ACA will vary from company to company. For employees that are over 30 hours per week and currently not covered by your current plan do you a) Make them FT and add them to existing plan; b) offer them an alternative, lower cost plan; c) adjust scheduling practices to find an the right mix of full-time and part-time workers based on your labor budgets; d) pay the penalties as they are incurred?
Regardless of your strategy, your workforce management system can be a major asset to your ACA compliance and labor cost control efforts.