In years past, the field of human resources was seen as a data entry or administrative type of position. HR was in charge of recruiting new employees, helping them understand company policies through an orientation process, reviewing compensation policies and creating performance management standards. HR wasn’t necessarily viewed as a “profession” that held a seat at the table.
More recently, this impression has changed, and is still changing.
Human resources professionals have become more like strategic partners in their organizations, helping to promote growth and best practices. Now, because employment laws and health care and IRS regulations have become more complicated, HR professionals have had to up their game and be more concerned with federal and state agencies and their regulations, compliance and basic legal requirements.
Many people working in the HR field don’t normally think of themselves as “change management agents.” Well, the reality is now much different. Change is constant in the human resources field and HR professionals need to adapt. The ever-changing landscape of employment laws has increased the need for HR to adapt, and to have reliable, accurate sources of information.
This is especially true now, as the Affordable Care Act has turned health insurance — and the offer of health coverage by employers — on its head.
Here’s an example of the law’s complexity: On Jan. 1, the ACA employer mandate went into effect for Applicable Large Employers, known as ALEs, which include employers with 50 or more full-time (and full-time equivalent) employees. However, there is transitional relief available this year for those employers with 50-99 employees if certain conditions are met, giving these employers more time to adapt to the rules.
In January 2016, however, all employers with more than 50 full-time (or equivalent) employees will have to comply with the employer mandate or face penalties. Employers need to understand the implications of these provisions and plan accordingly.
In addition to federal rules, Vermont and New Hampshire have their own laws that must be taken into consideration, as well.
Vermont opted to create a state health insurance exchange while New Hampshire partnered with Healthcare.gov, the federal health insurance exchange. Both of these options create more rules and regulations that human resources professionals need to be familiar with.
Many employers may not realize that, even if they are considered small employers under their state rules, they may still be considered an Applicable Large Employer under the federal rules. For example, Vermont counts full-time employees when determining small- or large-employer classifications; federal rules count full-time equivalents. It is important that HR professionals understand the differences. A business could be a small employer, sponsor health insurance through its state exchange, and still be considered an ALE for federal purposes, which means the organization needs to be concerned with penalties and reporting as well.
Throughout all of 2014, many ALEs have been struggling to figure out which employees they need to offer insurance coverage to in order to avoid the employer mandate penalties. The ACA requires ALEs to offer coverage to those employees working 30 hours or more a week.
The IRS has released guidance on how to “measure” employee hours worked to help employers make those determinations. There are specific guidelines, including a standard measurement period, an initial measurement period, the administrative period and the stability period.
These rules can be complicated and are much more complex than can be described here, and I highly recommend organizations research these rules, check with their insurance broker and contact legal counsel if there is uncertainty in scenarios that may involve a penalty.
If an ALE hasn’t measured its employees’ hours, the time to do so is now.
ALEs with 100 or more full-time or full-time equivalent employees are under the employer mandate that began Jan. 1. This could mean penalties for the month of January if hours were not measured to determine if an offer of coverage needs to be made to particular employees.
Another ACA complexity on the horizon: required employer reporting. This involves IRS tax forms, which have just been released by the IRS. Due to the information required to be included in the reporting, businesses may need to analyze their HR technology capabilities. Gathering the required information for tax reporting may require pulling information together from a variety of sources. Now is the time to review how that may be accomplished. The first reporting will be in January 2016 for the 2015 year.
The ACA certainly has created more administrative work for human resources departments and payroll departments, and it has an impact on managers and supervisors as they try to coordinate the hours worked by individual employees.
Human resources professionals need to become well versed in these rules. If they do, they can have a huge impact on their organization’s ability to manage and track the requirements of the ACA, saving their organization from paying penalties and keeping revenue where it belongs: on the bottom line.