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Health Care Reform: Strategies to Help Control Costs, Mitigate Risk, & Decrease Penalties
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Now that the U.S. Supreme Court has ruled it is constitutional, Health Care Reform (the Patient Protection and Affordable Care Act, or the ACA) is moving ahead full speed. With it comes what is perhaps the most massive and complex HR compliance challenge for employers in U.S. history. To gain insight into the attitudes and behaviors of employers regarding certain upcoming ACA requirements the ADP Research InstituteSM, a specialized group within ADP, surveyed human resources and employee benefits decision makers on the eve of the landmark ruling. The survey includes a national sample of small (1-49 employees), midsized (50-999 employees), and large (1000+ employees) companies. Read the Fact Sheet containing survey findings to see how prepared U.S. enterprises are to meet the ACA compliance requirements – and take some time to measure your own Health Care Reform compliance posture.
The Supreme Court’s Ruling to Uphold Health Care Reform Was a Surprise
While over half of human resources and employee benefits decision makers acknowledge the U.S. healthcare landscape is going through profound changes, many were not envisioning the degree of change that June’s Supreme Court ruling validated. Most of those surveyed predicted the justices would strike down as unconstitutional at least part, if not all, of the Affordable Care Act. Only about 10% thought the court would act precisely as it did – to uphold the entire law.
Many Employers Have a Mixed Level of Awareness and Preparedness for Health Care Reform
Predictions can produce consequences. Because so many companies expected some level of rejection of the Health Care Reform law by the Supreme Court, perhaps they took a “wait-and-see” attitude when it came to implementing upcoming ACA requirements. The survey indicates very mixed levels of awareness of and preparedness for specific upcoming ACA requirements. Maybe most significantly, while human resources and employee benefits decision makers in four out of ten large companies express a high level of confidence that they understand employer obligations under the ACA, only half as many small and midsized employers feel this way.
The Fact Sheet discusses the most important upcoming Health Care Reform regulations spawned by the ACA legislation. In the case of each of these regulations, awareness of and preparedness to meet the ACA requirements is lagging – putting HR compliance activities into overdrive. For example:
- Summary of Benefits and Coverage (Fall 2012 open enrollment) – A third of large companies are not currently prepared to meet this imminent requirement
- W-2 Reporting of the Value of Health Insurance (January 2013) – Many companies impacted by this requirement (those issuing 250 or more forms W-2 in 2011) will turn to their internal staffs to perform the valuation calculations
- Notifying Employees about Public Exchanges (March 2013) – More than 60% of human resources and employee benefits decision makers in small and midsized companies are unaware of this requirement
- Establishment of Public Exchanges (January 2014) – A fifth to a third of decision makers across all sized companies do not know what impact Exchanges will have on their company
Health Care Reform Is Here – More Regulations Are Coming
- Shared Responsibility (2014) – Fewer than half of midsized and large companies have estimated their exposure to potential penalties
- Excise Tax Assessment (on so-called “Cadillac” Plans in 2018) – Most companies have yet to assess whether they will be affected by the 40% excise tax (levied upon insurers but certain to be passed on to employers).
Will “Private Exchanges” Provide HR Compliance and Cost Relief to Employers?
Private Health Exchanges – established by third-party administrators and insurers – are emerging as an alternative avenue for healthcare coverage. While most companies surveyed have not investigated the value of Private Exchanges, about half of human resources and employee benefits decision makers in large companies say they plan to implement Private Exchanges in conjunction with defined-contribution healthcare funding. Read the Fact Sheet to see how this approach is gaining traction – and what the likelihood of adoption is among small and midsized companies who want to help their employees, while complying with the growing regulatory and cost burdens of Health Care Reform.
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HR Compliance: Are Employers Ready for Health Care Reform?
Download our Fact Sheet, “HR Compliance: Are Employers Ready for Health Care Reform?” Read the major findings from the ADP Research Institute’s national survey of small, midsized, and large companies to gain insight into their attitudes and behaviors regarding certain ACA requirements, escalating U.S. healthcare costs, and the future of healthcare benefits.
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About Fact Sheet: The data and conclusions come from a recent survey conducted by the ADP Research Institute, a specialized group within ADP that provides insights for leaders in both the private and public sectors around issues of human capital management, employment trends, and workforce strategy. See the Fact Sheet for details on research methodology.