Mile Two in HR’s Moccasins – Along a PPACA Path


A few months ago, I blogged about how beneficial it had been to be placed in a situation where I could sit in the proverbial HR chair and understand how technology can be leveraged to advance HR. A client of mine had asked me to fill the role of HR Director on a contract basis and I willingly accepted the challenge and have been blessed by the experience since. I am happy to report that the journey continues to provide great insights that only make our consulting stronger. Over the last month, there have been two particular experiences that have given me further insight into how critical the role of technology can be in the SMB space. Those two opportunities are centered on the administrative and strategic implications of our new friend, the Patient Protection & Affordable Care Act (PPACA). As has been highlighted by nearly everyone in the industry, the sheer volume (and opportunity) created by PPACA is astounding. These two most recent opportunities that have presented themselves to us are: W2 Reporting and Pay or Play Modeling (aka, PPACA Calculators). With respect to W2 Reporting, my client had greater than 250 employees in 2011 and so we were charged with helping the organization pull together the data necessary to provide to the payroll provider. At face value, the assumed effort to pull this data together seemed rather straight forward. However, the organization did not have a benefits administration throughout the year and, therefore, as you can imagine, the effort exceeded my original assumption. First, we had to identify the total costs of the benefits, which, of course, differed from the easily tracked deduction amounts. Then, we had to determine employees that were with us only a portion of the year – those that were new hires and those that terminated – and apply the cost calculations pro-rata to those employees. As has been the case throughout my experience of walking in HR’s shoes as part of this consulting project, the value of technology in the form of a benefit administration system, became crystal clear to me. Had we the ability to run an ad-hoc report from a fully-functional benefit administration system, the effort would have been 10% what it was. The second opportunity to witness the value of technology came in the form of assessing the financial impacts of the Affordable Care Act. My client is in the same boat as many employers in terms of trying to estimate how PPACA will affect the bottom line. Is it better to “Pay or Play? Well, thankfully, there is an emerging business model that has grown out of PPACA to help employers calculate the financial implications of the Act. These businesses have developed actuarial-based calculators to help organizations model various scenarios to understand whether it may be more advantageous to pay the associated penalty or should the employer continue offering benefits, but tweak their contribution strategies or plan designs to more effectively meet the affordability and coverage requirements of PPACA. For my client, we utilized one of these calculators and it provided tremendous value in helping us assess our situation and forecast the potential financial implications. I was thankful to have this leading-edge technology at our disposal so that we could make efficient and effective* decisions regarding the future of our benefit program. (*=as effective as they can be, given that PPACA will very likely shift 100 times over the next 12 months before Jan 1, 2014!). As a result of these two experiences (and countless others), we remain resolute that technology can be an effective enabler to help advance HR and make life simpler for all. Advancing HR through Technology.

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