Over the last few years, our firm has been called upon to review literally thousands of hourly/service employer health plans. Three things have become glaringly obvious to us:
- Consultants are either ill-informed or lazy when it comes to understanding the nuances of ACA compliance. This is particularly true when it comes to service sector/hourly workforce clients.
- Most employers are either fully or partially out of compliance, in many cases even using illegal plans that may imply legality, but do not meet minimum legal standards.
- A large number of employers are carrying massive risks, unaware, as are their consultants, that in most cases no reinsurance is in force to protect them against catastrophic claims. They are literally one sick employee away from bankruptcy.
The consequences of the above are yet to fully emerge as to date, the IRS has been somewhat lax in its enforcement efforts. We fully expect them (IRS) to ramp up their enforcement/collections efforts in the next few years. Feeling safe, because nobody has knocked on your clients door, will be of little comfort when they finally do and it turns out that you, the paid consultant, gave bad advice or were too lazy to do your due diligence because “these were only the hourly workers”.
I expect that over the next two years, our firm will discover and replace hundreds of ineffective, illegal or overpriced “ACA solutions” or advise changes in existing coverage to be more in line with risk and price to coverage value. Let’s hope none of this applies to you.