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The Affordable Care Act Overview and Analysis
Introduction
The Affordable Care Act (ACA) was enacted to increase the population of insured American citizens. It has expanded access to insurance through easing Medicaid eligibility and introducing subsidized covers. This rule regulates the market for private insurance environments. The law was introduced to lower the health services cost per capita, as well as improve medical care experiences and population wellbeing. This paper discusses the impact of the act on employers and workers.
The Impacts of the Affordable Care Act on Employers and Workers
The effects of ACA on employers, part-time workers, full-time employees, and temporary staff are negative. The administrative cost linked to law compliance is high. For this reason, the amount of money spent by employers to perform their duties is increased. Unfortunately, the raised cost is shifted to employees through some strategies such as higher coinsurance and copayments, higher deductibles, higher drug cost shares, and higher premium contributions (Graves & Mishra 2016). Consequently, staff on full-time salary have been reduced.
The excise tax assessed on higher premiums plans affects employers negatively. Since this tax is significant, health care managers are taking action to maintain insurance premiums under the required threshold that can be taxed. Precaution undertaken by most health organizations to avoid the levy includes moving staff into consumer-driven health plans such as high deductible health plans. The high-deductible health plans impair permanent employees access to healthcare and it increases financial hardship. In addition, it also reduces employment chances of part-time and temporary staff on a full-time basis. Thus, ACA has a negative effect on both the financial and health security of employees.
Potential Pitfalls for Organizations Trying to Comply with the Law
According to the provision of the employer shared responsibility in ACA, employer-sponsored health insurance should be provided by large employers. Organizations with more than 50 staff members must offer health coverage to their employees (Graves & Mishra 2016). Due to the high increasing cost attributed to ACA, organizations workforce has been reduced significantly. In addition, compensation and pay rise are rarely given to employees. These have led to low job satisfaction that has resulted in high turnover rates. Loss of experienced and skilled manpower equates to a loss of productivity that hinders progress. For these reasons, employers who adhere to ACA are likely to close their businesses.
Affordable Care Act Enforcement
It is not good for the Department Of Labour and the Internal Revenue Services to be involved in the enforcement of ACA. Although these sectors are meant to improve transparency in regards to health coverage, plan, and cost, they are continuously creating complex regulations and rules governing workers benefit plans. For this reason, the organizations accounting departments and human resource managers are struggling to understand the magnitude of the law implementation requirements and reports needed for compliance. In addition, the need to report correctly to these governmental bodies coupled with penalty and fines threats exerts a considerable amount of pressure on companies, which are already lacking sufficient finances.
The Function of Human Resource Manager
Large employers who do not offer health coverage for their full-time workers are bound to face penalties, which are costly to the firm. Since it is not mandatory for part-time employees to be insured, the human resource manager should change the job structure to meet the changing labor demands. This can be done by switching permanent staff to work on part-time or contract basis. The cost associated with ACA increases with the number of employees. Thus, the manager has to reduce the working time, freeze pay rise, and maintain the number of employees to less than fifty.
Reference
Graves, J. A., & Mishra, P. (2016). The evolving dynamics of employersponsored health insurance: Implications for workers, employers, and the Affordable Care Act. The Milbank Quarterly, 94(4), 736-767.
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