Technology: An Employer’s Ally in Health Care Reform

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Editor's Note: As Maryland and the nation move ahead with health care reform, Center Maryland invites experts in the field to join the conversation with their observations and advice for our readers. Leading off is Brenndan Mohler, a principal at Employee One Benefit Solutions and the Co-Legislative Chairman on the Board of The Maryland Association of Health Underwriters. He looks at the increasingly critical role of technology for businesses dealing with employee benefits.

By Brenndan Mohler

With more than 16,000 new IRS agents ready to enforce penalties and regulate the recently passed health care reform bill, employers are quickly coming to the realization that their responsibility reaches well beyond the “pay or play” provision.

New reporting requirements, mandatory employee communication correspondence, and auto-enrollment specifications threaten to burden employers with time-consuming data collection and the possible exposure to extensive fines for non-compliance. So what’s the solution? Better technology.

The trend is clear: employers with 50 or more full-time equivalent employees are investing in new benefits administration technology to ensure that they remain compliant with the new regulations.

This technology, while in most cases initially requires employers to incur some additional upfront costs, has proven to be a wise investment. Employers are saving time in data reporting and ensuring a safety net to the fines for non-compliance, which they would likely face without it.

There are numerous new health care responsibilities that employers are about to assume. For example, starting in 2011, employers will be required to report the aggregate cost of health benefits on each employee’s W2 form. Employers with 200 or more employees must auto enroll new hires into an employer-sponsored health plan once they become eligible, if they do not have another source of coverage (originally scheduled to take effect in 2014 but most likely will take effect much sooner).

Beginning in March 2012, employers must provide a summary of benefits and coverage explanation that must meet standards set by the Secretary of the Department of Health and Human Services in consultation with the National Association of Insurance Commissioners. Written communication pieces may be distributed via paper or electronic form, but failure to do so can cost an employer $1,000 per failure – and each enrollee constitutes a failure.

In 2013 and 2014, reporting requirements will expand as employers must inform their employees of the existence of an Exchange and provide free choice vouchers to employees. Employees are eligible for vouchers when: an employee contributes between 8 and 9.8% of family income toward the cost of coverage, if the employee’s household income is below 400% of the Federal Poverty Level and the employee does not enroll in the employer-sponsored plan.

Trying to make sense of the new regulations is enough to make an employer’s head spin. Don’t panic! There is a way to manage all of the above regulations and more. Investing in a new or upgraded benefits administration system can capture all of the required data and perform the functions necessary for compliance.

Some companies are even beginning to provide product upgrades to existing clients without any additional costs. This is a tremendous advantage for employers who are worried about their compliance responsibility yet plagued with budget restraints.

Confidence is not a word employers commonly associate with health care reform. However, with better technology and sound advice from a respected broker, employers are able to arm themselves with the tools to successfully navigate through healthcare reform and the compliance demands that go along with it.

Brenndan Mohler is a principal at Employee One Benefit Solutions and the Co-Legislative Chairman on the Board of The Maryland Association of Health Underwriters. He can be reached at .
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