ADP RI: Employers Need Integrated Approach To Comply With Obama Care

ADP RI: Employers Need Integrated Approach To Comply With Obama Care
White House (Pete Souza) [Public domain]

A study from the ADP Research Institute (ADP RI) regarding the challenges and opportunities offered by the Patient Protection and Affordable Care Act (PPACA), popularly known as the “Obama Care”, found that it is focused on the employer-sponsored benefit plan.

ADP RI: Employers Need Integrated Approach To Comply With Obama Care

The Obama Care plan requires new administrative communications, reporting, compliance, tax, and plan design requirements, which has a great impact on the employer-sponsored healthcare benefit plan.

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According to the research institute, employers need to review their employee benefit plan, particularly the coverage mandates and the excise tax on high-cost health care coverage as soon as possible. Beginning in 2018, a 40 percent excise tax is required on health care benefit costs more than $10,200 for individuals/$27,500 for family coverage.

The ADP RI said the average plan costs these days are already approaching the required level of during to the increasing health care costs. In order to avoid paying the excise tax, employers need to concentrate on improving their ability to manage health care costs and ensure a consistent and high-quality health care.

John Harlinger, author of the study, suggested employers should consider the three types of exchanges available as the Health Care Reform takes effect. According to him, the Private Exchanges offer the advantage of lower cost and high-quality service, because it is a combination of the existing limited Limited Exchanges and the new Public Exchanges.

Private Exchanges offer different plan choices aggregated by a provider or an outsourcer with employer input. It also allows employers to define a contribution and use qualified funding strategies.

Limited Exchanges are traditional employer-sponsored plans, with three to six offerings, while the coverage and quality of services vary in Public exchanges, as required by the Health Care Reform, and it is under the jurisdiction at the state and federal level.

The report said it is necessary for both employees and employers to understand the requirements and their responsibilities, in order to comply with the health care reform. The study also suggested for employers to integrate automated time and labor management tools, payroll services, and benefits administration, to be able to manage possible issues actively.

A related ADP RI study also revealed that 33 percent of medium sized companies in the United States paid fines (average 6.4), due to noncompliance with government regulations last year.  Organizations processing their own payrolls paid penalties three times more than entities that outsource their payroll.

Regina Lee, President of ADP Major Account Services, said the number of midsized companies outsourcing their payroll processing to help mitigate risk in an increasingly complex regulatory environment is growing. According to her, “As more mid-market organizations realize the value that outsourcing can offer, we’re also seeing increased demand for our ADP Workforce Now solution, which helps midsized companies simplify the regulatory compliance process, reduce their administrative burdens, and focus more squarely on growing their business.”

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