TOLMAN & WIKER INSURANCE SERVICES, LLC
Posted July 16, 2013
The recent postponement of the “Pay or Play” provisions of the Affordable Care Act (ACA), otherwise known as Healthcare Reform (or in some circles as Obamacare) has only temporarily postponed, not eliminated, that requirement of this wide-ranging, complex law.
While the implementation of some tracking and eligibility requirements under the law have been delayed, many other provisions still apply in 2014. There is still a considerable amount of work that businesses need to attend to in order to comply with those regulations. Engaging in proper planning now will help businesses position themselves to avoid adverse financial consequences from issues such as failure to properly structure their plans, and failure to properly track the number of FTEs to determine eligibility. Individuals are also subject to penalties if they fail to comply with the individual mandate to obtain coverage from either their employer or through the insurance exchanges.
Strategic decisions around human capital management under the ACA are still pending for many businesses, including whether to provide coverage for their employees or to send them to the insurance exchange marketplace. There are many nuances that impact the balance an employer may wish to achieve between the costs and the benefits of providing group medical insurance. The attraction and retention of key employees is a significant strategic issue related to most firms’ competitive advantage, and benefits plans are a useful tool in the total compensation mix that helps make an employer desirable. Key considerations include: the cost of providing those benefits on a pre-tax basis versus the cost of excise tax penalties on an after-tax basis for failure to provide that coverage; the risk of losing key people if they do not provide benefits; and the financial impact on those employees through their after-tax purchase of benefits in the exchange.
More than ever before, navigating the complexities and prospering under the ACA requires expert benefits consulting advice, and advice from expert legal counsel. Even though this reform remains challenging, there are opportunities for businesses to achieve competitive advantage in this process. For now, despite the delays in the government’s implementation of “Pay or Play,” this law remains a significant, problematic issue for individuals and businesses alike.
Savvy executives are using this delay to ramp up their strategic planning with the help of experts who truly understand this territory, and who can guide them to success in this new healthcare reform environment.
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