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Are Affordable Care Act (ACA) Costs Driving Workforce Management?

Published: July 5, 2017

When it comes to the benefits plan, the ultimate aim of most employers is retaining a high quality workforce and minimizing turnover. However, there are some organizations that aim to remain compliant with laws and regulations without spending exorbitantly. Also, there is a minority that doesn’t have a specific benefits plan and reacts to change when it occurs.

Organizations have always found it difficult to make decisions related to employee benefits and the Affordable Care Act (ACA) has added to the complexity of this task. A number of questions for organizations are raised by the Affordable Care Act (ACA). The Affordable Care Act (ACA) has made many organizations realize the importance of having better data to understand their workforce, both in the past and going forward. In order to ensure compliance with the Affordable Care Act (ACA), employers need to do the following three things:

  • Offer all but 5% of their eligible fulltime employees ‘minimum acceptable’ healthcare insurance
  • Ensure the healthcare insurance plan they offer is ‘affordable’
  • Ensure the healthcare insurance plan (s) offered and the contribution of the employer to these plans isn’t set up to favorably treat certain employees

The cost for meeting the aforementioned requirements is something large employers will be required to pay. In case you didn’t know it already, any organization with fifty or more fulltime employees is referred to as a large employer. Any one working thirty hours a week is considered as a fulltime employee. Today, the requirements and costs of the Affordable Care Act (ACA) are driving the strategies for managing workforce.

Today, some employers are considering restricting the hours employees work each work to less than 30. The reason for this is obvious: employers can avoid the requirement to offer healthcare coverage to employees by limiting the hours they work each week to less than 30. Also, the Affordable Care Act (ACA) has prompted some employers to consider a freelance-workforce for their organization. Fortunately for job seekers, the aforementioned employers are few and far between.

The U.S economy is fast recovering from the economic downturn or recession. As a result of this, many employers are looking for full-time rather than part-time employees. According to the U.S. Bureau of Labor Statistics (BLS), the United States experienced a 9% increase in full-time employment between 2010 and 2015. The workforce landscaping in America is evolving. 18 to 24 year olds are entering the workforce while baby boomers continue to retire.

The costs and requirements of the Affordable Care Act (ACA) have not prevented employers from placing a higher priority on attracting, recruiting, and retaining full-time employees. More importantly, they haven’t caused the employers to limit hours. In short, Affordable Care Act (ACA) costs are driving workforce management but not to a degree many imagine.

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