Small and mid-size businesses have been dealing with the complicated changes under the ACA for the past several years. Healthcare reform has impacted their companies in many ways well beyond health insurance. Most recently, they completed initial IRS reporting requirements without the worry of being penalized however, employers need to prepare for a possible audit and minimize any gaps in information and processes found during this year’s efforts to remain compliant for next year.
There are several aspects of ACA reporting that begin with correctly assessing and documenting employee hours. A couple of important strategies that employers need to consider are:
- Defining the classification of full-time, part-time, variable and seasonal jobs and identifying how employees are classified
- Accurately recording eligibility determination components including tracking and calculating hours worked for all employees
- Maintaining employee communication documentation regarding eligibility and offers of coverage or signed waivers
As demonstrated above the tracking of employee hours is very important to employer processes under the ACA. It has also recently become important for maintaining compliance with the new Department of Labor (DOL) overtime rules, which can be found here and are set to go into effect December 1. These are the main tenants that employers must implement and follow:
- Sets the minimum standard salary level at $913 per week; and $47,476 annually for a full-year worker
- Sets the highly compensated employees (HCE) level for full-time salaried workers nationally at $134,004
- Salary and compensation levels for while collar and HCE employees will automatically be updated every three years, beginning January 1, 2020
- Additionally employers may use bonuses, incentives, and other types of compensation to satisfy up to 10 percent of the new standard salary level.
- There are no changes to the duties tests.
These new guidelines go into effect in less than six months and if not followed can result in fines, criminal charges and lawsuits against an employer. Tracking employee hours has taken on a whole new meaning in regards to meeting the ACA and new federal overtime update guidelines.
In light of these changes, employers who choose to focus on their core business functions may want to outsource these types of activities such as payroll, overtime, and record keeping. A third-party vendor or Professional Employer Organization (PEO) can help businesses with the day-to-day efforts of tracking employee hours and help with the ongoing applicability of new rule changes. A PEO can take the complexity out of managing this aspect of a business, which just seems to grow more confusing and cumbersome every year.