Employee Benefits...Benefits of HR
Now that elections are over, whether the Health Care Reform within the Affordable Care Act (ACA) is a gain or a loss for the common, employed US individual is yet to be seen.
According to a survey conducted by the Midwest Business Group on Health (MBGH) in collaboration with The Benfield Group, a health care consultancy, quite a few adjustments will take place among benefit plans between now and 2018.
Where do Most Employers Stand?
On the positive or negative side, major findings mostly indicate that:
- There is little indication that employers will drop health benefits within the coming year;
- Employers who plan to reduce their benefits in 2014-2016 are 31%, while 41% will do so for 2017-2018. This is an adjustment to the 40% "penalty" tax on high premium insurance - Cadillac - plans;
- The majority of employers - 52% - plan to make vision and/or dental coverage voluntary benefits in 2013. It will rise to 55% by 2018.
What is for Small Businesses and Employees to do? Carrot and Stick?
Depending on their employment affiliations - businesses of 200 and over falling into the above study - or small private businesses, and employees alike have to adjust to the ACA. There are gains and losses both for the common employee and for small businesses. There is a Small Business Tax Credits for Employers with fewer than 25 employees and average annual wages of less than $50,000 that provide health coverage for employees. Failure to do so by 2014 for small businesses of 50 full-time employees will result in fines.
For transparency and good employee relations, it would seem that HR would need to issue a disclosure stating to employees that if they elect to waive benefit coverage, they would be subject to a mandated maximum penalty set at 2.5 percent of their income. Not that employees are not already aware of it. On the other hand, that need is already counteracted by the trend that most employees set by reducing access to health benefits through regulation of terms of employment, such as the definition of, or a shift from full-time employee (FTE) versus part-time employees. It is certainly better to state that if one does not meet a certain numbers of hours - qualifying them for a FTE status or benefit-eligible status - they would systematically waive their rights or eligibility to health benefits. And by the way, let your employees know what HSAs and HRAs mean to them in practical terms: you will avoid anger and frustration on all sides.
Of course, we all know that there are so many other issues at stake. It is a matter of organization policy and philosophy. HR is an evolving world...
What's for HR to do?
What does it mean for HR? We are facing strategic decisions due to stiffer business competition that leads to more demanding standards of performance that in turn will inevitably erode even more the already low employee morale.
So, HR people, brace yourselves. The road ahead is not an easy one because benefits are just a piece of the puzzle that makes the HR business. And you already know it. So, make things easier on yourself: be good to your employees, be creative since strategic decisions will not always make you look good. Lead the change. Embrace the change, whatever it is if you want to make it work for everybody. Take the time to communicate.
HR represent employers not employees? It is heard too often. It seems clear that no employer would exist without employees....