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Entries in Patient Protection and Affordable Care Act (3)

Wednesday
Jun262013

PEOs Help With Health Care Reform and the ACA.

Affordable Care Creates Demand for HR Outsourcing & PEOs

There is no question that  the (PPACA) Patient Protection and Affordable Care Act and Healthcare Reform has created the greatest opportunity for the PEO industry in decades. Employee leasing companies, HR outsourcing firms, benefits administration and health insurance enrollment specialists are ramping up to assist small and mid sized business owners and non profit organizations with implementing the Affordable Care Act, and complying with all the new rules and regulations.

Costs - Credits - Penalties - New Reporting For All

The complexities and costs associated with the Patient Protection and Affordable Care Act can be too overwhelming for the average small and mid-sized companies. Under health care reform, all group health plans are required to provide a minimum level of coverage for medical expenses. This could mean higher premiums for plans providing richer coverage than before. Limited benefit and high deductible health plans will not qualify under the PPACA.

Small business owners, described as 25 employees or less, can qualify for a premium tax credit. The credits are calculated based on the number of employees, average wage base, and the premiums paid by the employer to cover their staff and workers. Low wage paying employers with 15 employees or less, can expect to qualify for a credit of up to 50% of their premiums.

See Tax Credits - Do We Qualify?

The Affordable Care Act requires employers with 50 full-time employees or more (based on 30 hours per week and over) to provide affordable health insurance coverage for their employees or pay a $2,000 penalty per full time employee, excluding the first 30. This is often referred to as “play or pay” by individuals and representatives of the health insurance industry. Businesses and organizations who employ workers at the legal threshold should make certain they are in compliance at all times. The law requires a formula that measures the hours of full and part time workers to determine the total number of full time equivalent workers that an organization employs.

Larger employers must make certain that low wage employees do not contribute more than 9.5% of their earnings for their coverage. In addition to testing for full time workers,there are additional considerations for seasonal and short term workers. This can making testing especially complicated for construction, farming, health care, hotels and restaurants, landscaping, maintenance, schools, and the staffing industry. Under the PPACA, the IRS has instituted new regulations for reporting employer paid contributions for health insurance benefits that affects companies of all sizes.

PEOs - Health Reform’s Best Kept Secret

Employee leasing, personnel management, and Professional Employer Organizations are uniquely qualified to provide the solution. PEO’s provide companies with a comprehensive integrated solution that entails the administration and processing of payroll, they calculate and submit payroll taxes accurately and on time, and submit all payroll reports with the required information to your local, state and federal agencies making certain that your organization is in full compliance.

     “The PEO Industry is in the best position to tackle all the complexities of administering and complying with the Affordable Care Act and Health Care Reform.”

“The trouble is that I don’t hear enough employee leasing companies and professional employer organizations telling the business community exactly what it is that PEOs do, how we can relieve them of problems of dealing with health care reform, and help them stay focused on running their business.”

Rod Diekema - PEO Network

Some larger professional employers offer a choice of health insurance plans that have been tested to assure compliance with the PPACA. Many PEO’s can assist larger companies with testing for determining full time equivalents and contribution strategies to attain “safe harbor” status to avoid facing a $3,000 contribution penalty, should an employee obtain coverage in the public exchange instead of opting for the company’s group health plan. 

Inspirity - Getting The Message Out

 

     “Health care reform has generated over 15,000 pages of regulations filled with increased complexities, compliance and cost for your business. You can spend the time and money to figure it out, or you can  …..”

Paul Sarvardi - CEO Inspirity

Health Care Reform Video

Complying with health care reform will affect every employer in some way. Depending on the size and structure of an organization’s workforce, the remedies and requirements may be unique to your organization, even in the same industry. This is why the administrative capabilities, benefits expertise, human resource information technology, and payroll systems of HR Outsourcing and Professional Employer Organizations can be invaluable today, and in the future.

Sunday
May262013

Health Insurance Marketplaces Are Coming - Are You Ready?

What PEOs and Small Business Owners Should Know

With 2013 almost halfway over, our attention turns to 2014, when the Affordable Care and Patient Protection Act goes into effect. The individual mandate kicks in, requiring all Americans to purchase health insurance or face a fine. Employers with 50 employees or more will also face penalties of $2,000 per employee (the first 30 employees don’t count) for not providing a minimum level of health insurance coverage.

Small business owners, or employers with less than 50 full time employees (defined as 30 hours or more) are exempt from any penalties, fines or requirements to provide coverage to their employees. To the contrary, smaller businesses (defined as 25 employees or less) are rewarded for offering coverage to their workers. In 2014, companies can receive a credit of up to 50% of their premiums. The credits are calculated on a sliding scale which favors lower wage employers with 15 employees and less.


Most small business owners in America employ less than 50 full time employees. Those companies will not be subject to most of the provisions of the Affordable Care Act. This doesn’t necessarily relieve employers from any it’s responsibilities when it comes to guiding and assisting their workforce to comply with the individual mandate. Many lower wage employees will qualify for premium support in the form of credits that will offset their cost of coverage.

According to statistics compiled by the PEO Network, www.peonetwork.com, there are over 700 employee leasing, personnel management companies, and professional employer organizations operating throughout the United States. Approximately 90% - 95% of their client companies are firms with less than 50 full time employees. Many of their clients, small business owners, will be seeking the employee benefits and health insurance expertise these companies provide. PEOs are uniquely qualified to handle the additional compliance, reporting and analysis that business executives, HR professionals and tax professionals will require.

Health insurance marketplaces, formerly referred to as exchanges are being implemented in all 50 states. Some will be operated by the states individually, like California’s health insurance exchange called “Covered California” http://www.coveredca.com. Other states, like Florida, will introduce marketplaces which will be operated by the federal government, while other states will manage marketplaces as a joint partnership.

Are you ready?

Friday
Nov092012

Health Care Reform - The New Reality for PEOs

The End of Denial for Employee Leasing and PEO Companies?

NAPEO, The National Association for Professional Employer Organizations has published on their website napeo.org an announcement entitled;

PROFESSIONAL EMPLOYER ORGANIZATIONS CONGRATULATE PRESIDENT OBAMA ON REELECTION, LOOK FORWARD TO WORKING WITH ADMINISTRATION ON HEALTHCARE.

I had to clean my glasses. This is an industry where many of it’s owners and executives, (over 98% of all employee leasing companies and PEOs are privately held) have fought health care reform every step of the way. Large contributions were made to The National Federation of Independent Business, The Chamber of Commerce, (click on this link to see the NFIB position) and a host of Republican PACs and lobbyists. We reported on their attitudes and views about Health Care Reform and the PPACA in our earlier blog post Want to Repeal Health Insurance Reform, Not Likely!!!.

NAPEO President and CEO Pat Cleary is quoted as saying “PEOs are already the go-to source for small businesses looking for help in preparing for and complying with the healthcare benefits changes brought on by reform, so we feel we have an important role to play as the implementation of the ACA proceeds” and offered its industry’s expertise as the Obama administration moves forward with implement the Patient Protection and Affordable Care Act (ACA).

Only time will tell if NAPEO, and the industry as a whole embraces Health Care Reform or not. My opinion is that the PPACA is one more reason small business owners should consider the services of proactive, qualified and responsible employee leasing companies and professional employer organizations.