don't let the affordable care act turn your business upside down

What you need to know…

Don’t Let The Affordable Care Act Turn Your Business Upside-Down

Presented by:Mark Young

Senior Vice President, Human Capital PracticeSynergy Services

Sponsored by: PeopleFluent

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Don’t Let The Affordable Care Act Turn Your Business Upside- Down| October 30, 2014

Mark YoungSVP, Human Capital Practice - Synergy Services

• With Company Since 2009• Responsible for:

• - Internal & External HR• - Independent Contractor• Classification Compliance• - Human Capital Management • Consulting for Contingent Labor

• ACA Compliance Strategy and Implementation

Your Speaker Today

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PeopleFluent & Synergy Services

Your Sponsor:PeopleFluent

• Leader Human Capital Management

• In over 5,200 organizations

• 214 countries and territories

• 80% of the Fortune 100

• 170 VMS customers• $7B managed spend

Your Speaker is with:Synergy Services

• Headquarters in Denver, CO• Specialization and focus:

• IC Compliance • Discovery and Analysis• Compliance Validation and

Engagement• Employer of Record Services• Vendor Compliance Services• Contractor Reutilization Programs• Human Capital Practice• Flexible Workforce Consulting Services

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What Will You Learn Today?

1 Why Labor Supplier Compliance with the ACA should matter to you and your business.

Suggestions on how to work with your Labor Supplierson Next Step Solutions for ACA Compliance.3

Client Case Study: Lessons Learned and Best Practices from an End Client perspective on Supplier Compliance with the ACA.

2

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Have you been approached by your contingent labor suppliers about the impact of the ACA on your business?

Poll Question:

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The Affordable Care ActThe Basics of the ACA

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• Pay or Play Mandate - Large EmployersEffective 1/1/15 (100+ employees)

• Pay or Play Mandate - Small EmployersEffective 1/1/16 (50+ employees)

• IRS responsible for policing this law• Annual reports due: April 2016• Impacts nearly every single company in America by

virtue of the Individual Mandate

ACA Highlights

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2015 Employer “Play or Pay” Penalties

No offer of “minimum essential coverage” (MEC) for full-time employees* (and children)

- and - At least one employee obtains subsidized exchange coverage

Offer of MEC but offer is not also Qualifying and Affordable,

and FTE obtains subsidized exchange-based coverage

Tier 1 Penalty$2,080 annually per

total number of FTEs in EIN

Tier 2 Penalty$3,120 annually per

each FTE that receives subsidies from an

Exchange

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The Affordable Care ActWhy Should Labor Supplier Compliance with the ACAMatter to Me?

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Why Compliance MattersWho’s on First Base?

• Co-Employment• Classification Matters• IRS Common Law Test• Solution to avoid ACA Co- Employment Concern:• Treasury Regulation Section 54.4980H-4(b) (2)

and -5 (b)• Take Credit for Suppliers ACA compliant plan

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Why Compliance MattersIt’s Time to Get Ready

• Supplier’s decision to Play or Pay

• Client is at risk for Supplier’s decision to Pay rather than Play

• Third Party relationships through existing suppliers matter too

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Do you have a strategy regarding your labor suppliers’ compliance with the ACA?

Poll Question:

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Lessons Learned and Best PracticesThe Affordable Care Act

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Common Law Gut CheckBest Practices

• Does the client company exercise direction & control over the services of the contingent worker?

• Does the client have the right to direct and control the services of the contingent worker?

• IRS 3 main aspects of the Common Law Test:- Behavioral Control- Financial Control- Relationship of the Parties

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Best PracticesPossible Consequences “if”…

Supplier does not offer compliance coverage

(does not “Play”)

- OR -

The offered coverage in not “affordable” or of “minimum value” -

Worker may go to the Exchange

for coverage and identify the client as his/her “Common Law

Employer”

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Best PracticesBut…here’s the GOOD News

• Treasury and IRS provide a Safe Harbor for Clients with Suppliers offering ACA qualifying benefits to their employees

• The IRS will allow Clients to “take credit” for Supplier’s qualifying plans “if” the fee the Client pays for workers participating in the Supplier’s plan is reasonably higher than the fee for non-participants

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• Educate Senior Leadership• Create Cross-Functional Committee• Not just HR and Employee Benefits personnel• Supply Chain / Procurement• Legal

• Educate Manager / Supervisor Level• Compliant Suppliers• Internal Resource for Questions• Matrices for appropriate actions

Best PracticesGain Internal Support

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• Create Model Contract Language• Require to work with W2’s• Require to provide ACA Compliance Coverage• Notice of Rehire of former Employees of Client

Reporting Requirements

• Facilitate greater Collaboration with Suppliers

• Educate Suppliers on your Requirements• Strategic and Creative Solutions• Transition Plan if unable to meet requirements

Best PracticesStrategize with Suppliers

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The Affordable Care ActNext Step Solutions

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• Survey your Suppliers • Employment Size: Form 941• Letter from suppliers insurance carrier certifying

ACA compliance

• Business Decision:• Continue services if coverage is not provided?

Next Step SolutionsSurvey Says…

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• Discrimination• Hiring Decisions• Continued Engagement• Conversion to Full-Time

• Privacy• Personal Benefit Elections• Unnecessary Visibility

• Special Issues Around Retirees• Retiree Benefits

Next Step SolutionsConsider the HR Issues

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• Application of the Co-Employment remedy, Safe Harbor

• Obligations of the Supplier• Offer of Coverage• Necessary Tracking• Reporting

• Indemnification

Next Step SolutionsCreating Contracts & Amendments

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• How You Are Invoiced Matters• Reporting Requirements• Avoidance of Privacy and Discrimination Issues

• Invoice Options• Conformity to business needs• 1 solution for multiple suppliers

Next Step SolutionsCheck Please!

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• Supplier ACA Compliance is Important to You

• What have other Organizations done to prepare for Jan. 1, 2015

• Preparation Suggestions

Summary

THANK YOU!

QUESTIONS?Mark Young

[email protected]

Sponsored by: PeopleFluentpeoplefluent.com

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