518-373-4111
Just when you thought you had everything to do with the Affordable Care Act (ACA) under control, there is one other business practice that many employers have not yet addressed – making sure you update your employee handbook for ACA compliance.
Note: this applies to Applicable Large Employers (ALEs) – that is, those with 50 or more full-time or full-time equivalent employees. Employers who may be under that threshold now but anticipate possibly reaching or exceeding it soon should also make sure their handbooks are up to date.
For ALEs, an offer of coverage must be made to full-time employees (who work at least 30 hours per week), letting them know about the health care options available to them. Employers must also provide a waiver for employees that do not wish to participate in the company’s plan. In order to be compliant, employers must demonstrate that the offer of coverage and waiver form have been made readily available to employees. An easy way to do this is to include it in the employee handbook and review it with every employee.
In addition, certain policies and procedures regarding health care coverage must be updated in the handbook to reflect the ACA requirements. For instance, if your handbook currently states that temporary employees or interns are not eligible for health coverage, you will need to change it if any of those employees work over 30 hours per week. The ACA does not exclude these types of workers as long as they reach the 30-hour threshold, and if you do not offer coverage to them, you will be out of compliance and risk incurring penalties from the IRS.
Another example relates to the waiting period before an employee’s health coverage begins. If your current policy allows for more than 90 days’ waiting period, you are not in compliance. Even stating that an employee must wait 3 months could be problematic, as 3 months is often more than 90 days. The ACA requires the waiting period be no more than 90 days before health care coverage applies.
Finally, if you have complied with all ACA requirements – you’ve distributed all necessary paperwork to your staff, determined employee eligibility, and have been reporting accurately – but if you haven’t reflected these changes in your handbook, confusion could ensue. If you’ve sent out paperwork regarding eligibility requirements that is not the same as what’s in your handbook, chances are you’ll be getting a lot of questions from your employees.
The bottom line is that your handbook is a crucial line of defense against an IRS or Department of Labor audit. Keeping it updated with all the ACA requirements will help avoid any non-compliance issues, and will eliminate confusion or questions about your policies and procedures.
GTM can help keep you compliant with a FREE customized employee handbook when you sign up for our HR On Demand service. Contact us at (518) 373-4111 to learn more.
