Employee benefits are a top five expense for businesses across all industries. The Patient Protection and Affordable Care Act (PPACA) is about to make cost management even more challenging. In light of the King v. Burwell Supreme Court decision, looming PPACA deadlines for IRS reporting, the Employer Mandate and the Cadillac Tax will debut as planned.
Additionally, the IRS debuts its $900 million dollar AIRS enforcement system this year. AIRS is the “ACA Information Recovery System” and is the mind-blowing new IRS technology platform that puts teeth in federal enforcement efforts. And, unlike the government’s failed ACA website, early reports indicate that this new system has been thoroughly tested and is already online and ready to operate. Creating a strategic 3 to 5 year employee benefits plan is more important now than ever.
In order to help your restaurant meet the upcoming PPACA mandates in a proactive and timely manner, it’s important to create an employee benefits strategic planning process that streamlines and prioritizes plan design changes over the next 3 to 5 years. Like a business plan, this process allows your business to strategize from 50,000 feet and most importantly, forces company executives to have conversations around benefits in an organized way.
Each company’s goals and objectives are different, so too are their benefits plan. For this reason, a successful 3-5 year process stresses flexibility, with gradual change over the first few years. This applies to every category of employee benefits.
Here is a sampling of considerations from a 3 to 5 year process:
• Value added/voluntary products – Businesses moving from rich health care plans to high-deductible plans will want to consider offering voluntary benefits, including hospital indemnity plans, accident policies and more, to maintain a high level of offerings for employees. How will you “make it up” to your employees so they don’t feel their benefits are being reduced?
• Funding – With PPACA expanding the definition of small businesses to 99 lives, more businesses will consider self-insurance options than ever before. What is the ideal mechanism for your business to fund employee benefits?
• Contributions – Health care reform will force employers to reconsider their employee contribution strategies. Will you continue with the traditional, flat dollar methodology, move to a new salary-based, tiered approach, or a defined contribution in which employees are given one lump sum each year to allocate as they choose?
• Communications – The traditional open enrollment packet isn’t enough to introduce a new way of thinking about benefits to your employees. Instead, proactive organizations will create a communications campaign around the new benefits, including the use of e-guides and online tools, like private exchange-decision support. How will you drive engagement, adoption, and understanding as well as proof of offer and declination for your new employee benefits?
• Compliance – The PPACA will usher in many new reporting requirements. Using the 3 to 5 -year strategy to map out your specific compliance requirements will be critical. How are you going to prove and certify your benefits compliance?
• Technology – Technology will play a critical role in your long-term benefits administration goals to ensure the solutions you choose establish, prove, track and maintain compliance today, while supporting your business strategies of tomorrow. How are you going to present new health care plans, add voluntary benefits, implement a wellness program, change how you communicate with employees about their benefits, meet new compliance and reporting regulations, change how your employee benefits are funded and how you contribute to them financially?
Regardless of what your restaurant’s ultimate benefits re-design looks like, being purposeful and flexible will ease the employer/employee transition. An annual evaluation of what worked, what didn’t and what changes have occurred will cause the employee benefits strategy to evolve.
Bottom line, find a trusted advisor; work together to develop a strategy and come up with a viable solution before it’s too late! An experienced and knowledgeable advisor will not only ensure that your business is compliant with reform, but will most importantly discuss a strategy to avoid any negative impact of this legislation on your business.
Join Us: Leading global insurance brokerage HUB International is hosting complimentary compliance seminars taking place in January and February, addressing employee benefit cost saving strategies, the new IRS reporting guidelines, costly ACA compliance, and much more. The agenda will equip you with the detailed information you need to seize control of your health plan’s bottom line and ensure that your restaurant is bulletproof against costly ACA compliance penalties.
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