ACA Compliance Issues Pose Formidable Challenge For Mid-Sized Businesses

Mid-sized businesses, those with 50-999 employees, are experiencing a gap in confidence when it comes to the U.S. economy, with the cost of health coverage, the large number of government regulations, and the complexities of the Patient Protection and Affordable Care Act (ACA) ranking among their top three concerns. These results stem from a new study released by the ADP Research Institute. More specifically, 69 percent of midsized business owners and executives are concerned with health coverage costs, along with costs of other benefits, 54 percent are concerned with the ACA specifically, and 51 percent are concerned with the level and volume of government regulations.

According to ADP, it is important to take note of trends among mid-sized business owners, since they contribute more than one-third of all U.S. jobs and they represent nearly one-third of private sector U.S. gross domestic product.

Lack of clarity on ACA’s consequences. Unfortunately, it appears from the study that many mid-sized businesses are out of touch with not only management of ACA issues, but economic consequences of non-compliance with various laws and regulations. Even though the constitutionality of the ACA has been upheld by the U.S. Supreme Court and many of its provisions have been implemented, more than half of midsized businesses in the ADP study said they still have no plans in place to manage it.

In addition, more than one-third of businesses in the study reported that they had been fined or penalized for the failure to comply with laws regarding workforce management, but 58 percent of those did not know how much the fines cost. Also, 47 percent did not know how many times they had been fined. Neither result bodes well for businesses that may be facing the imposition of the ACA’s employer mandate penalty.

ADP adds that, while concern about the ACA has dropped slightly since 2013 among mid-sized businesses, less than a quarter of them say they are confident that they have the necessary tools and information for making decisions about the best health and benefits strategies for their companies. Furthermore, more than three quarters of mid-sized business owners reported lacking confidence that their organizations understand all of the ACA’s new regulations.

Strategies among mid-sized businesses for managing ACA compliance include outsourcing benefits administration (7 percent), putting together a plan to control or lower the cost of employees’ health insurance (56 percent), reducing the number of plans offered to employees (33 percent), and offering wellness programs (46 percent).

For more information, visit http://www.adp.com.

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