Human Resources is going to continue to be impacted greatly by Healthcare Reform. In a previous post, I provided resources. This is meant to be a short list of the ways this will affect you and why it might be a good time to ask for a raise. Here are just some of your job duties and challenges relating to healthcare reform:
Compliance – You have to know whether your business is covered (there are exemptions for smaller employers and other things such as hardship cases) but you also have to know which employees are covered. (Full timers are, but what constitutes full time?) Expect many new compliance mandates.
Lots of Math and Analysis – You may have to analyze and determine whether it is cheaper to offer healthcare or not offer it and pay the penalty. If you do offer it, do you stay grandfathered into the plan you have (which will undoubtedly go up) or do you switch and hope it is cheaper? You should be aware of potential tax credits available to certain size employers to assist with premium cost. There also prohibitions on lifetime and annual benefit spending. You will also be required to offer, at no cost, a plan that covers almost all preventive care.
Finding a Good Broker/Agent – I hope you trust your broker or agent because there is a lot to learn and the days of him or her just sending in a renewal at the last minute are over. You need an advisor, someone who knows the ins and outs of reform and is going to guide you through all the little nuances that have a big impact on the bottom line. If you don’t have one, you’re going to need to find one.
Implementing Automatic Enrollment – Companies with over 200 employees will have to enroll everyone in their plan and then the employee can choose to opt out. Seems like extra work when you could just enroll those that want in instead. It will also undoubtedly make employees very angry when they forget to opt out – and you’ll get to deal with it.
Determining Salaries – Depending on whether you choose to offer healthcare you will need to reassess salaries dependent on your healthcare choices. For example, how much more can you offer someone if it’s cheaper for your company to pay the penalty? How does it compare to those that offer healthcare?
Mandatory Breaks for Nursing Moms – Not only do you have to provide “reasonable” breaks but you have to provide a “comfortable” place other than a bathroom. Anyone know who defines “reasonable”? Is it the baby? And what does “comfortable” mean? This could present a whole host of issues for you that I’m not even going to get into here.
The New Recruiting – Offering healthcare is no longer a competitive advantage in hiring top talent. In addition, your company may decide full-timers are too expensive and start asking you to recruit temps, part-timers, and independent contractors.
Layoffs – Your company may decide it’s worthwhile to restructure so it remains small enough to avoid coverage under the act. If that happens, who gets to spread the word?
More Turnover and Less Retention – Children can now stay on a parent’s plan until age 26. If you don’t offer benefits, will younger employees leave to work somewhere that does, once they reach that age? How many of your employees stay at your company because they have pre-existing conditions and are afraid they won’t get healthcare if they leave? Mandated coverage removes the need to stay and you may lose employees because of it.
Unhappy Employees – There will be no more pre-tax healthcare. There is a new box on the W2 where you need to include the cost of healthcare. Even if the plan cost is shared 50/50 between employer and employee, the employee will be taxed on the total amount of the plan, not on what he or she paid. So instead of this not showing up on their W2 at all, now amounts employees probably aren’t even aware of are going to appear as taxable income. Can you imagine your office at tax time?
Workplace Wellness Programs – Grants will be established to create these programs and the employer will be required to offer them to receive financial incentives. Who gets the job of designing and implementing them?
On the bright side, this spells job security for you. (And for HR consultants, this has opportunity written all over it, especially with smaller employers who don’t have an HR department.) That is well and good but rest assured, by 2014, you’ll have earned that raise!