After yet another Supreme Court ruling to uphold the Affordable Care Act (ACA), it is clear that employers will be continuing to prioritize all existing ACA guidelines in order to achieve compliance. In spite of this being the third serious challenge against the health care law’s individual mandate, the 7-2 decision on June 17 has put to rest two consolidated court cases in favor of the ACA.
The two cases, California v. Texas and Texas v. United States, were centered around one major issue: whether reducing the penalty for not obtaining health insurance rendered the minimum-coverage provision unconstitutional, and therefore void. If so, the enforceability of the remaining ACA components would have also been called into question.
Though the 5th U.S. Circuit Court of Appeals sided with Texas on the issue initially, the Supreme Court reversed it – making it clear that neither the states nor individuals challenging the law have the legal grounds to sue. For concerned employers, who might have had to seriously alter their own policies had the ruling gone the other way, rest assured: you likely don’t have to change a thing.
That said, even if the Supreme Court's ruling doesn’t necessarily prompt any major changes for your business, it should bring certain compliance requirements to the forefront of your operational concerns. Let’s take a closer look at the current ACA requirements, to ensure the pandemic hasn’t left you at greater liability risk.
The ACA & COVID-19
The COVID-19 virus caused employers across the nation to have to modify their workforces with furloughs and layoffs, and change the status of many employees from full-time to part-time… As you’re likely aware, this means the ACA classification of innumerable workers was drastically altered from the pre-pandemic world.
Now that we are emerging from the disarray of that period, you must ensure you are still fulfilling all aspects of compliance. If you aren’t accurately cataloguing your full-time employees and offering them affordable healthcare coverage as part of their benefits, you could be facing harsh audits and penalties under the Biden Administration. In terms of helping your business recover in 2021, allowing more financial setbacks to occur could be a detrimental mistake.
Complying With the ACA
Under the ACA, covered employers must offer group health insurance to at least 95 percent of qualifying, full-time employees – those generally averaging 30 hours a week or more. Failing to do so will incur a penalty fee. Specific coverage obligations and reporting requirements are based the size of your organization.
As a general rule:
- Businesses with 50 or more full-time or equivalent employees, also known as an “Applicable Large Employers” (ALEs), and are generally covered under the ACA.
- Smaller businesses are exempt from the health care requirements, but can earn tax credits for still electing to offer group health insurance to workers.
So long as your employees’ employment status has been properly tracked, and changes to classifications were updated appropriately throughout the progression of the pandemic, your ACA filing requirements should still be intact and compliant. However, if your workforce management was interrupted over the course of the past year, or you’re charging too much for employee contributions, now is a good time to assess if corrections need to be made.
Whether its tracking hours for accurate classification or the need to generate reports ensuring affordability, technology can help alleviate the unwanted stress associated with achieving flawless benefits administration.
Solutions for Simplifying ACA Compliance
When it comes down to it, benefits administration and compliance are already a lot to manage – but global crises can create even more hurdles when they force you to make well-timed adjustments to your workforce. As a specialized provider of hourly workforces, EPAY Systems understands how vital a dependable HR solution is to the success of your operation.
As an extension of our seamless Human Capital Management (HCM) system, our Affordable Care Act Toolkit offers a variety of reporting capabilities to help you stay on top of ACA compliance no matter the conditions. It can help you calculate your total number of full time employees and monitor FTE totals, all while maintaining a digital audit trail from a live ACA dashboard. You’ll even be able to set up real-time alerts for employees approaching the 30-hour threshold.
Our premium affordability report delivers a guideline for employees’ maximum health insurance charges, as well, so you can safeguard compliance and ensure your coverage falls within the safe harbor range. Want to see our full benefits administration at work? Take a tour, or request a personalized demo today.