How Do I Pay for my Employees Benefits Under ACA? (Part #1)

Do you contribute to your employees benefits? If you answered, “yes” – the next question is, do you have to change the way you contribute to employee benefits because of the Affordable Care Act (ACA)? ACA seems to be the new “four letter word” in many offices and HR departments throughout the country.

As your organization steams toward the next renewal of your benefits packages, like a freight train at top speed, you may find yourself making decisions that fall outside the realm of “which deductible do I choose?” Instead, you may find yourself doing a balancing act with your budget or hitting the drawing board on how employee contributions work.

Not only do many folks out there want to pretend ACA doesn’t exist, droves of business professionals have adopted a commonplace, rather standoffish, approach that “I’m not learning it because it’s just going to get changed/delayed again”.

Others are anticipating retirement before ACA is fully enacted - obviously an enticing option for which this is feasible. Companies all over the country capitalized on an early renewal in their 2013 plan year that delayed some of the implications of ACA – time is dwindling and your broker (with sweaty palms) will come knocking in the coming weeks and months with renewal rates.

The good news? Small groups (50-99 employees) will have options this renewal season due to legislation surrounding a catchy term referred to as “Grandmothering” (see Monica’s blog post on the topic here). Not only will this renewal provide you with ACA rates – sorry to those of you who thought you’d escape seeing them – but many of you will also get these new grandmothered rates.

Don’t be afraid of ACA rates though. Some groups will find the ACA rate more beneficial to their employees not only from a benefit perspective, but also from a cost perspective. (If we’re your broker we will help you understand your options so that you are empowered to make the best decision possible for your company and for your employees - if we’re NOT your broker, call us – we can fix that, too.) So, you have your renewal rates, you know what you’re going to select and you have a budget in mind… what’s next? It goes without saying that every company that provides benefits to their employees does it with the best intentions possible.

Take care of the people that take care of you, right? Your HR staff should be reinforcing that benefits keep the team healthy and reporting to work – they enable your organization to attract and retain the top talent for your segment. It also goes without saying that over time, as benefits have increased in cost, many employers have had no choice but to pass that cost along to the employees. The serious decisions are coming, but first… a caveat.

My goal here is to get your “wheels turnin’” on what to consider. There are many moving parts to ACA and to paying for employee benefits. Terms like non-discrimination (read my blog about non-discrimination

here) are becoming huge players in determining how much money employers are contributing and how those dollars are distributed. Don’t look at this as the “Guide to Paying for Benefits” but instead consider some thought provoking ideas to help you navigate the complex geography of compensating employees for their benefits. Take some time to digest these ideas. The next post in this series will take a look at how companies cover (or don’t cover) benefit costs.