ACA reporting impact ‘a big unknown’ to finance, HR departments
Companies’ struggles to adapt to the ACA, experiencing varied wellness program outcomes and continuing to deal with rising benefit costs and a need for more HR and finance collaboration, HUB International’s small- and middle-market employee benefits study shows.
Just under 60% of respondents — who represent more than 400 senior-level HR and finance executives at U.S. companies — ranked ACA compliance as a top priority, even though 2016 is the first year for ACA reporting and IRS audits. It took a backseat to employee wellness, a top priority for 83%, and cost management at 76%.
“I think it’s because we’re now six years into ACA and there’s a general sense of exhaustion with it,” says Linda Keller, the national chief operating officer of employee benefits for HUB International.
As a result of ACA compliance, 64% of respondents said they would struggle to stay in business. Nearly 60% were concerned about the burden of calculating affordability and 45% were concerned about calculating full-time employees and equivalents.
HUB’s study also looked at the results employers’ have seen from their wealth and performance initiatives. While 66% experienced ROI, less tangible aspects have proven harder to measure. Just 35% reported improved productivity and 35% cited improved morale. Employee turnover, absenteeism and chronic disease management had even lower rates of measurable improvement.
“Those results are harder to measure,” Keller says. “As employers are moving forward on wellness programs, they’re structuring them more around employee engagement, employee productivity and employee morale.”
These key ROI benchmarks are crucial to prove the importance of wellness programs to employers. More than 60% of respondents believe they are doing all they can to rein in rising benefit costs, in which wellness and performance initiatives can play a role. Employers are underutilizing other benefit and healthcare cost strategies, with only 51% leveraging voluntary benefits, 31% pharmacy carve out, 18% self-funding and 16% narrow network strategies to manage costs.
When savings on benefit costs aren’t maximized, the whole company can suffer. The relationship between HR and finance departments is indicative of this. More than 78% of finance experts consider HR a strategic partner, but almost all still have concerns with benefits costs, HR missteps with executive liability and ACA audits. Around one-third of finance experts expect HR to go over budget, mismanage ACA reporting and pay IRS audit penalties.
“One of the biggest concerns this year from finance is ACA reporting and the potential fine for that,” Keller says. “ACA reporting is a big unknown to finance and HR, and they need to talk about whether they have the data we need to report correctly and, if not, what they are doing to get that data.”