Whatever the context of Sun Tzu's famous quote about winning through preparation, it's hard to imagine a more apt circumstance than employment today.
Indeed, with the advent of the ACA (Affordable Care Act aka Obamacare), preparation and vigilance have become paramount as the rules of employment have become exceedingly complex and they continue to change faster than the winds of an Eastern China typhoon.
Employers thinking they can leave ACA compliance to the back office are making a major mistake
David Dourgarian, CEO of Tempworks
Ignore ACA and you're likely to end up like Tzu's defeated warriors, saddled with unexpected setbacks and losses.
The good news is that many of your competitors aren't preparing. They're hoping this storm will pass, or they figure they'll muddle their way through it. And that will leave their underserved clients on the lookout for staffing solutions that will help them win.
In this first installment on Winning in the Obamacare Era, StaffingTalk looks at key details of the law and recent changes to it and begins to map out a winning strategy.
Let's start by looking at some recent news:
Recent Changes in the Law
Although minor rulings are affecting ACA on an almost daily basis, a major update took place on February 12th 2014, when the Federal Registrar released another update to the rules regarding ACA requirements. Some key decisions that were made that directly affect Staffing companies include:
- The definition of a large employer has been changed from 50+ FTE’s to 100+ FTE’s for purposes of determining which companies are required to follow ACA compliance.
- The percentage of eligible employees required to be offered minimum essential coverage was lowered from 96 percent to 70 percent.
- Penalties for not offering insurance to employees will not apply to the first 80 full-time employees. Previously this number was 30 full-time employees.
- Previously, the break in service rule was 26 weeks. This has been decreased to 13 weeks, however. The staffing specific break in service rule regarding length of break vs. length of previous assignment still exists.
The only winning approach to the ACA is to stay nimble in response to its changes," says Tempworks EVP, Casey Kraus
Problems with Legacy Software Systems
Given the extent of this February round of changes, it's a given that more are in store. "The only winning approach to the ACA is systems and processes that allow you to stay nimble in response to its changes," says Tempworks EVP, Casey Kraus.
Kraus notes that a lot of employers he meets are realizing that their legacy software systems don't provide that flexibility. "There are a lot of vendors out there who have taken the hard-coded report approach to ACA. That doesn't work."
What does work, according to Kraus, is close collaboration with cloud-based software providers that fully integrate front and back office. "The employers who win will be those who can rapidly respond to ACA related alerts coming from their integrated payroll and recruiting systems."
Configurable Alerts and Reports
Easily configurable look-back, measurement, and administrative periods are key
--Susan Wurst, VP of Tempworks
Tempworks VP Susan Wurst says the correct approach involves customizable periods. The software should make it easy to set the length of look-back, measurement, and administrative periods.
She advocates monthly increments for these stats as well as setting a cutoff day of the month for insurance enrollment. This cutoff date allows the system to alert users when an employee in their administrative period is nearing deadline for enrollment.
Wurst say her analysis of the ongoing changes in ACA include input from a panel of attorneys and staffing industry leaders, including Mike Nix, CFO at Labor Solutions, a customer of hers whose focus has been on the tracking, compliance and automation of ACA.
In our next post on Winning in the Obamacare Era, StaffingTalk will look at reports, specifically lookback, insurance and financial exposure reports.