The PPACA Creates Great Demand for HR Outsourcing & PEOs

Posted by on October 2, 2013 in Hiring [ 0 Comments ]

HR OutsourcingThe passage of the Patient Protection and Affordable Care Act (PPACA) is lauded as one of the landmark legislative achievements of President Obama’s administration. Regardless of your feelings as to the merits of the legislation, you must admit that the PPACA has created an incredible opportunity for the PEO industry. The sheer volume and complexity of the documentation associated with the Act will keep benefits administration firms, health insurance specialists and a host of other employer support organizations in business for years to come. Small businesses could certainly do worse than to use a professional employer organization to comply with this gargantuan change in the HR landscape.

RelatedSmall Business Benefits: 5 Points to Attract Top Talent

…And New Requirements for All

As is typical, the government crafted this law without much concern for the individuals and entities that would be required to comply with it. As such, the PPACA is a massive document of almost 1000 pages not including any subsequent rulings made by associated government agencies. In short, it is a job just to keep up with the changing requirements associated with it.

This burden of paperwork may not be particularly onerous for large corporations with a dedicated HCM staff and in-house counsel but it can be overwhelming for small and mid-sized companies. The cost of this administration is just another burden in addition to the cost of actual compliance with the requirements of the Act.

Related: Payroll Services: How Much Should You Outsource?

The Government “Solution”

In certain instances, small businesses with 25 employees or less can qualify for a tax credit of up to 50% of the insurance premium. This “accommodation” covers a relatively small number of businesses and still does not absolve them of the need to pay a hefty insurance premium for employees who were not previously covered.

A more typical case is a company with 50 full-time employees who must provide affordable health care coverage or pay $2,000 per employee for non-compliance. As you can see, the “solutions” always involve the expenditure of your money. In fact, the premiums involved are so exorbitant that many small businesses are actually calculating whether or not it is cheaper to just pay the fine and be done with the whole matter. You can be certain that further regulation will close that loophole.

Related: Get quotes from PEOs that can help your business.

The PEO Solution

Simply put, the situation has grown into such a morass of government regulation and punitive action by federal agencies that a business cannot afford to overlook any of the intricacies of the PPACA. Unfortunately, this is easier said than done. Professional Employer Organizations offer an excellent and affordable option for dealing with this issue, however.  PEOs are uniquely qualified to administer the benefits aspect of the PPACA and to ensure compliance as their core competency involves understanding the Act as it stands and any possible changes in the future. PEOs understand the need for timely compliance in payroll and benefits and with the PPACA in general. Instead of mastering the complexities of the PPACA for yourself, it is conceivable that your company would be better served by availing itself of the knowledge, experience and resources of a PEO.

About the Author: Carolyn Sokol is founder and President of PEOcompare.com as well as Business Development Director to compareHRIS.com, both of which help match businesses to the right HRIS or PEO provider for their particular needs.

(Image: stockimages via freedigitalphotos.net)


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>