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In ACA’s second year, large employers respond

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in Compensation and Benefits,Human Resources

More than half of employers with 1,000 or more employees are unprepared to comply with all Affordable Care Act (ACA) regulatory requirements, but they are moving ahead with plans to deal with ongoing changes in the benefits landscape that the health care reform law has spawned.

Those findings come from a new survey by the ADP payroll processing and HR management firm, which discovered that large employers are changing their benefits plans in response to the ACA and offering health benefits to more employees.

One thing they’re generally not doing: Cutting payroll to dodge the ACA’s employer mandate, which requires large employers to provide health benefits or pay tax penalties.

The ADP survey—titled “The Affordable Care Act and Employer Confidence: Navigating a Complex Compliance Challenge”—found that many large employers don’t feel fully prepared to manage the ACA’s complex reporting requirements. However, the law has prompted them  to adopt new workforce management and cost containment strategies.

Plan designs are changing: As a result of the ACA “Cadillac tax” on high-value health care plans that becomes effective in 2018, employers are shifting more costs to employees. Nearly two-thirds (63%) told ADP they plan to increase employees’ deductibles and co-pays or reduce employer contributions.

In addition, many employers are trying to reduce costs by emphasizing consumerism through plan design. More than half (57%) plan to offer a consumer driven health plan—typically high-deductible coverage combined with a tax-advantaged account employees can tap to pay deductibles.

Coverage expanding to part-timers: Most large employers (61%) told ADP they have already begun offering health benefits to part-time workers, above and beyond the ACA mandate to cover full-time employees. For many, it’s easier and cheaper to cover all employees than to handle the ACA’s complex full-time/part-time reporting requirements.

60% won’t cut hours: The ADP study found that the majority of employers are not planning to change employee hours in response to ACA requirements.

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