Posted by Tim Hird on Monday, April 27, 2015 - 08:55
Now that 2015 is well under way, organizations across the nation are scrambling to comply with the Patient Protection and Affordable Care Act (ACA). CFOs still have many concerns regarding these complex and ever-changing regulations — from the time and effort required to ensure compliance to short- and long-term costs.
Executives don't expect regulatory pressures, across the board, to subside. In fact, nearly all (98 percent) of the U.S. financial executives surveyed for Financial Executives Research Foundation (FERF) and Robert Half’s Benchmarking the Accounting and Finance Function believe their regulatory compliance burden will either increase or, at the very least, stay the same in the near future.
Employers also estimate that 2015 healthcare costs will increase by 4 percent, according to Towers Watson’s 2014 Health Care Changes Ahead Survey Report. The survey also found that CFOs are becoming more engaged in healthcare strategy decisions because of the significant impact on the company’s bottom line.
As the topic of ACA compliance heats up throughout the corporate world, here are four critical facts CFOs need to bear in mind.
1. Compliance dates have changed
Businesses with 100 or more full-time employees and full-time equivalent employees (FTEs) are required to offer health insurance coverage to 70 percent of their full-time employees and eligible dependents, as of January 1, 2015.
By January 1, 2016, these businesses must offer coverage to 95 percent of their full-time employees. Businesses with 50 to 99 full-time employees and FTEs have until January 1, 2016, to offer coverage to 95 percent of employees. (See our Patient Protection and Affordable Care Act guide for a full list of dates and regulatory changes.)
2. Some small businesses qualify for up to 50 percent in tax credits
A tax credit is available for certain small businesses with no more than 25 full-time employees and FTEs that choose to offer health insurance to their workers.
For tax years beginning in 2014 or later, the maximum credit increases to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers, according to the Internal Revenue Service (IRS).
3. Smart businesses are getting a head start
Although the deadline for compliance with the ACA employer mandate has been extended to 2016 for many companies, some businesses are well under way with their efforts to meet the requirements.
These early adopters have an advantage: They have time to plan strategies for keeping compliance costs down and determine whether they need to hire additional employees to assist with compliance efforts.
Financial executives should take time now to review IRS reporting requirements under Sections 6055 and 6056, determine which rules apply to their organization, and establish a procedure to start collecting the required information. That way, they won’t be left scrambling come January 2016.
4. Many organizations will need to hire additional staff
Fifty-nine percent of CFOs polled in a Robert Half Management Resources survey said they’re providing additional training to staff and 57 percent are increasing employees’ workloads in an effort to meet compliance objectives.
However, as the ACA compliance burden grows, many firms may find they will need to hire a compliance officer and other employees with compliance expertise, or bring in consultants to assist with compliance-related projects.
There is no question that ACA compliance continues to be a daunting challenge for companies across the United States. CFOs who keep an eye on the latest regulations —and their staff trained and informed — will be well positioned to help their organizations remain compliant while controlling costs.
What are your biggest concerns about ACA compliance? Share your thoughts in the comments below.