The penalty for non-compliance with HR regulations implemented as part of the Affordable Care Act (ACA) should not be taken lightly.
“Just on a COBRA (Consolidated Omnibus Budget Reconciliation Act) notice, if you don’t have the correct documents in line and you are not notifying employees accurately within the guidelines of the federal government, you can be looking at fines upward of $100 a day, per employee, per violation, that you are in non-compliance,” says Amy Weir, account manager at Benefitdecisions, Inc.
It is estimated by the IRS that 90 percent of employers are out of compliance.
“It’s a worthy investment to make sure whoever is handling HR is as up to speed as can possibly be on these regulations.”
Unfortunately, many employer groups are struggling to stay ahead of the changes.
“There is definitely education that needs to take place on the employer side,” Weir says. “HR departments are feeling it more and more and a lot of them are behind the curve on what it is they need to be doing and how to proactively manage that.”
Smart Business spoke with Weir about what companies can do to remain in compliance with the latest changes to health care.
What’s one example of the challenges faced by HR departments?
I’ll use the example of installing a HIPAA (Health Insurance Portability and Accountability Act) manual. The law was revised last year and you have to have this manual and certain privacy protocols in place.
Every employer should have an ERISA (Employee Retirement Income Security Act) attorney in place who specializes in certain aspects of health insurance law.
This attorney should be partnering with your insurance broker to gather the resources needed to put these manuals in place. You certainly don’t want to put anything in place as far as formal policy until you have an attorney review it.
Any information you get from a consultant, be it insurance or HR, it’s not going to be legal advice. Those are going to be suggestions. Every employer has different privacy practices and it’s going to be customized for each one.
That’s why it’s strongly recommended that you have outside counsel review anything, like a HIPAA manual, before it becomes formal policy in your organization.
What about the fear of even more changes down the road?
There is no shelf life for any of this. With the ACA, it’s pretty much an evolving and ever-morphing piece of legislation.
So you need to have a good trusting relationship with your broker and that broker should be advising you whenever there are changes coming up to make sure you are in compliance. This is what’s coming, this is the deadline and this is what needs to be done.
A lot of brokers are hiring people with HR backgrounds for this specific reason, so that person can be used as a resource to help them through these changes.
If you do not have a broker, you can subscribe to different HR resources such as the Society for Human Resource Management.
How concerned are employees about changes in HR and health care policy?
It’s more of an administrative challenge that HR departments are facing, regardless of the size of the employer.
Employees do expect HR departments to have information on things like health insurance exchanges and when they open or other policy changes.
That’s where you’re going to hear from your employees when you’re communicating the latest news on regulations that could affect both them and their health care status.
What can you as the leader do to help with this process?
Continuing education is always important and that’s certainly the case with the ACA and health care reform. Provide your team with additional training resources.
Send your HR people to seminars or classes that are offered by HR outsourcing firms. It’s a worthy investment to make sure your HR people are being properly supported and advised in this area.
It’s a huge advantage for any company to have people on staff, or have people at the broker or consulting firm that they work with, who can answer these questions and attend these meetings to keep everyone up to date with what is happening. ●
Insights Employee Benefits is brought to you by Benefitdecisions, Inc.