Prepare now to avoid Affordable Care Act benefits’ scrutiny later

Businesses that get their ducks in a row regarding employee health and retirement plans stand a better chance of surviving government scrutiny as the Affordable Care Act and other issues become reality in the years ahead, a panel of experts told suburban business leaders Thursday,

The panel spoke to the group of nearly 100 executives and entrepreneurs at the Daily Herald Business Ledger’s Newsmakers Forum on “Strategies and Tactics in the New Economy” at the Hilton Lisle/Naperville in Lisle.

While businesses have been relying on their human resources department to lead efforts to comply with the ACA, tax and financial people also need to be involved, said Carl Mowery, managing director of Grant Thornton LLP in Chicago. Mowery noted that the Internal Revenue Service has been establishing regulations for ACA requirements, and violations could cost companies millions of dollars in excise taxes. For example, he said, the act stipulates that an employer must provide health care to full-time employees working 30 hours or more.

“That simple statement caused the IRS to issue 144 pages of regulations,” Mowery said. “If not followed, an employer may find they are subject to large excise taxes even though they provided health care to the vast majority of their employees.”

He stressed businesses should be proactive in understanding the regulations and working to keep in compliance.

“The more that you are proactive, the less surprises you’ll have come 2014 and beyond,” Mowery said.

What goes for health care also plays in maintaining employee retirement programs, said Karie O’Connor, vice president at First American Bank. O’Connor noted the U.S. Department of Labor has been conducting more audits on retirement programs over the past few years, and she anticipated that trend will continue to increase over the next few years.

O’Connor stressed it’s important to have well-documented procedures of the plan in place, and to follow those procedures.

“That will be your first line of defense if you were to have a random audit, and certainly it is good practice for your business,” she added.

She suggested that companies form a retirement plan committee comprising everyone who deals with specific aspects of the plan, and that they understand their obligations to the plan. She added that they should also consider providing formal fiduciary training for the members.

“While it’s not legally required, it certainly does speak to your acting in the best interest of your employees and your plan participants,” O’Connor said.

Angela Adams, director of human resources for the Downers Grove-based Management Association of Illinois, said a recent survey found that one in four companies are planning on passing to employees some of the additional health care costs associated with the ACA. And, while PPO health care plans are still the most popular among companies — with 91 percent offering a plan to employees — health care savings accounts with high-deductible health plans are becoming more common as well.

“We’ve been seeing a trend over the last couple of years of employers going to only a health savings account with a high-deductible plan as their only option,” Adams said.

Adams noted that 71 percent of companies said they paid an average increase of 3 percent for health care coverage in 2012, while 36 percent had increased deductibles for employees and 32 percent had increased co-pays. Fifty-three percent had increased employee contributions, while 13 had changed the types of plans offered.

Presenting sponsors for the Newsmakers Forum were First American Bank and Human Resources Management Association of Chicago. Marketing partners were Fox Valley Chamber of Commerce, GOA Regional Business Association, Lisle Chamber of Commerce and Management Association of Illinois