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June 30, 2016 Human Resources Technology and Compliance

Achieving compliance through the effec:ve use of your HR technology Presented by: Jamie Hawkins, President & CEO, Benefit Technology Resources Sara Tountas, J.D., Director of Health Reform and Benefits Compliance, Acrisure

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Jamie Hawkins President and CEO of Benefit Technology Resources Benefit Technology Resources is the largest mid-market independent HR technology consulting firm in the United States. BTR helps insurance consultants and employers identify how today’s technology can streamline the way they administer their entire HR “back-office” functions and stay compliant with healthcare reform. She has 18 years of industry experience and over 14 years specializing in Human Capital Management technology solutions for employer groups with 50-20,000 employees. With over 400 providers in the technology sector, BTR has the unique skills to help employers identify and vet the solutions to best fit their needs, budget and timing.

Sara Tountas, JD Director of Health Reform and Benefits Compliance at Acrisure LLC Sara is an attorney with over 10 years of experience in employee benefits. As Director of Health Reform and Benefits Compliance for Acrisure, Sara assists clients in navigating the increasingly complex environment of employee benefit compliance. She is also actively involved Acrisure’s strategic health reform-related initiatives and provides ongoing compliance education and support to Acrisure agency partners. Sara has particular expertise in health and welfare benefit compliance issues, including the ACA, ERISA, COBRA, HIPAA, Code Sections 125 and 105(h) and wellness.

TODAY’S PRESENTERS

3 DISCLAIMER

The information in this presentation is intended for informational purposes only and should not be considered legal advice. The content cannot be used for avoiding Federal tax related penalties, or promoting, marketing or recommending anything that is tax-related. You are strongly encouraged to consult your own legal counsel and tax advisors to ensure compliance with applicable law. Please keep all provider information confidential. Confidential and Proprietary information of Benefit Technology Resources, LLC. Reproduction or distribution without prior written consent is strictly forbidden.

Benefit Technology Resources LLC Confidential & Proprietary Information – Not for Distribution

4 4 TODAY’S AGENDA

1 Challenges Facing HR Today

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Benefits of Leveraging Technology 4

5 ACA Reporting and Compliance

Technology Trends

How to Have Success with Technology


5 5 MAJOR COMPONENTS OF HCM

*Source Human Resource SoGware Comparison 2015 EvoSys


6 6 PROVIDERS – THERE ARE OVER 400 IN THE MARKETPLACE


7 7 HR TECHNOLOGY TRENDS IN 2016


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39% would like new benefits enrollment systems 33% seek better benefits administration tools and 31% are planning to spend money on improved employee benefits

technology According to a survey of HR Professionals by Employee Benefit News and Employee Benefit Advisor

HR TECHNOLOGY TRENDS IN 2016

Benefits Administra:on is booming!


9 9 CHALLENGES FACING HR TODAY IN ADDITION TO COMPLIANCE

•  ACA Compliance is challenging •  Rising costs that impact HR •  Data integrity issues with multiple points of entry

•  Lack of business intelligence/combined reporting

•  Lots of choices. 400+ in the market today


10 10 SYSTEM CHALLENGES FACING HR TODAY

•  Compliance -‐ACA •  Payroll AdministraNon •  Online benefit administraNon •  Applicant tracking •  Onboarding •  Billing reconciliaNon •  Electronic carrier feeds •  HRIS Tracking for Compliance


11 11 HR TECHNOLOGY AND EMPLOYMENT LAW COMPLIANCE

E-‐Documents •  HR can easily track employee’s e-‐signatures on documents: •  job applicaNons •  I9s •  employee handbooks •  employee disciplinary acNon In doing so, the company will be more prepared to show documentaNon and history in the case of a DOL, EEOC or ImmigraNon audits or invesNgaNons, reducing or avoiding any potenNal fines or penalNes.



Leave of Absence Tracking An HRMS allows employers to easily set up any number of employee leave of absence plans, such as FMLA. Accurately tracking leave of absence can prevent or minimize Wage and Hour Division violaNons and potenNal private civil acNon against an employer.



Applicant Training/RecruiNng Online job applicaNons and standardized quesNons provide neutral and objecNve criteria to avoid personal stereotypes or hidden biases, reducing the chance of discriminaNon suits. In addiNon to this, it allows employers to publish jobs to the most popular job boards and social networks to find a more diverse pool of candidates.



LMS/Training Online training provides: consistent message to employees on topics such as sexual harassment and diversity training. complete the self-‐paced training tesNng to confirm they understand the concepts record of when training was completed


15 15 KEY INSIGHTS


16 16 KEY COMPLIANCE DATES

March 31, 2016 (January 31, 2017)

Forms 1095-‐B and 1095-‐C required to be postmarked to employees and covered individuals.

May 31, 2016 (February 28, 2017)

Paper 1094/1095 returns must be sent to IRS. (Paper returns only permi_ed if filing fewer than 250 forms.)

June 30, 2016 (March 31, 2017)

Electronic 1094/1095 returns must be e-‐filed with IRS. (E-‐filing required if filing 250 or more forms.)


17 17 ACA - EMPLOYERS NEEDED TOOLS TO COMPLY

•  Tracking hours and eligibility from mulNple data sources

•  Year-‐end employee forms and IRS reporNng

•  How did reporNng go for 2015?

•  Required correcNons?

•  How can you improve reporNng for 2016?


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Payroll

Performance Management

Time Keeping

HRIS

Recruitment/ Applicant Tracking

Benefits Admin

HOW DO EMPLOYERS TRACK & REPORT?

Employee Data, Affordability Safe Harbor

ALE DeterminaNon, Hours worked, Full Time Equivalent Status

Eligibility, Benefit Status, Dependent InformaNon, Waive Reasons, Coverage Begin dates, end dates


19 19 ACA REPORTING OPTIONS

ACA Service Providers: 1.  Payroll Provider (ADP, Paychex, Ceridian, Paylocity)

2.  Benefits Admin provider (Employee Navigator, PlanSource, or bSwiG)

3.  Stand Alone ACA provider (Employee Navigator, Syncstream, Equifax, Tango etc.. )

Fall into 3 major categories


20 20 ACA REPORTING PROBLEMS

Common Problems with ACA Service Providers: •  Slow to respond to clients •  Data and processes are fragmented •  Not all are determining the codes for lines 14 and 16 •  Not consulNng or assisNng with system set-‐up •  Over-‐commit and under-‐deliver •  Lack of concern over accuracy/completeness of forms •  Not assisNng with correcNons


21 21 ACA REPORTING PITFALLS

Other Poten:al ACA Repor:ng System PiOalls: •  Tracking all “hours of service” required for ALE determinaNon and look-‐

back measurement rules •  Employee misclassificaNon (employee vs. independent contractor) •  Properly idenNfying new full-‐Nme vs. new variable hour employees •  Handling part-‐Nme employee eligibility •  Changes in employment status


22 22 ACA OUTLOOK

General Observa:ons: •  The IRS will be overwhelmed •  Some payroll providers are requiring addiNonal modules •  The pool of viable providers will shrink

•  Some will fail and leave the market •  Others will be purchased/acquired


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•  High AcNvity Levels-‐ employers are moving to more robust technology •  HR Technology is finally impacNng the bo_om line •  ACA compliance has been painful and can be costly •  Based on studies and research Employers want:

Bottom Line = Employers Want MORE Automation!

TECHNOLOGY IN TODAY’S MARKET

•  Paperless Onboarding •  Online Benefits AdministraNon •  HRIS Compliance and Tracking •  Mobile CapabiliNes


24 24 BENEFITS OF LEVERAGING TECHNOLOGY

ü Healthcare Reform Compliance – reduce the risk of potential fines, automate the paper burden.

ü Total savings of $19.07 PEPM can be realized through the accuracy and efficiency of complete automation (bswift benchmark study surrounding billing)

ü Reduce errors and omissions – 88% of spreadsheet documents contain errors. (University of Hawaii analysis)

ü Reduce multiple points of entry (payroll, HR, timekeeping and carrier websites).

ü Reduce paper with Employee and Manager self-service (i.e. onboarding and workflows).

ü Streamline and centralize communication campaigns.


25 25 OUR PROCESS

Discovery/ Needs Assessment

Prepare your Request for Proposal (RFP) to begin the provider review process

Ongoing technology support

We conduct a detailed discovery of your business needs

BTR Analyzes and Reviews proposals received by the providers and builds analysis

Schedule demos

Review agreements

Provide support during implementation

Post Implem

entaNon Phase

Search Phase

Mutual Non-Disclosure Agreement BTR will access our proprietary database to find the providers that match your requirements

Client makes decision on finalist BTR recommends onsite meetings with finalists


26 26 CHANGING – PAYROLL PROVIDERS BEST PRACTICES

•  Timeline •  Core typically is implemented 1st •  Don’t try implemen:ng benefits

administra:on at Open Enrollment – too much risk!

•  Tes:ng •  Don’t Rush •  TEST TEST TEST

•  Deploying Modules •  Short Term/Long Term ROI •  Change Management

•  Key Stakeholders •  Define Success •  Include ALL stakeholders

•  Final Decision •  Reference Checking •  SSAE16

•  Contractual Considera:ons •  Pricing •  When does billing start •  Service Level Agreements


27 27 HOW TO HAVE SUCCESS WITH TECHNOLOGY

•  Consult with Strategic Partners for assistance – this is a big expenditure •  Do your own discovery before jumping into a project •  Determine what success looks like at the end – Set Proper Expecta:ons!

•  Include all stakeholders in key discussions from the beginning •  Tweak things along the way and update your Nmeline as needed

•  Don’t rush – be sure you have given yourselves a reasonable Nmeline and allow for tesNng and more tesNng

•  TEST TEST TEST •  Measure results to determine if it was a successful implementaNon. •  Have a strong communicaNon campaign to educate managers and employees


28 28 HR TECHNOLOGY AUDIT CASE STUDY #1

Client

•  150 employees in Florida

•  Not ACA compliant.

•  Struggling with current payroll provider.

•  Disparate systems •  No HRIS system.

•  No Benefits Administration system.

•  Manual processes. .

Details

•  The client asked us to go through an HR Technology Audit.

•  Please refer to next few slides.


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Payroll system

Time Keeping

Medical Carrier

EE Training and Licenses

LTD / STD Carrier

FSA Carrier FMLA Spreadsheets

Internal Company Portal

COBRA Carrier

Background checking software

Recruitment Spreadsheet

Applicant Tracking Spreadsheet

E-Learning Software

Performance Management Spreadsheet

BTR identified 16 different touch points for each new hire, status change, and termination.

Time Keeping Spreadsheet

OSHA Incidents

WHAT IS BEING DONE MANUALLY?


30 30 WE ALSO REVIEWED THEIR BENEFIT PROCESS

Manual process, employee

completes forms

HR tracks employees’

waiting period

HR follows up with employee to

see who has completed the

forms.

HR receives form, and then

completes a benefit deduction form and faxes it

to the Payroll provider

HR routes deduction form to the payroll administrator

HR manually keys in add/term/

changes into each carrier

website: Medical, Dental, Vision, Ancillary,

etc.

HR sends confirmation to Broker that the

employee is enrolled

Monthly carrier bills are manually

reconciled by HR. Approx. 3

hours per month

Payroll administrator manually keys

deductions into payroll

RED IS MANUAL BLUE IS AUTOMATED


31 31 BENEFIT PROCESS WITH BENEFIT ADMIN SYSTEM

Employee logs in to enroll

online

Eligibility is managed in the

system

Payroll deduction file

is sent electronically

to payroll provider

Eligibility files are

electronically submitted to

carriers

Monthly carrier bills are

reconciled through the

system


32 32 HR TECHNOLOGY AUDIT CASE STUDY # 2

Client •  1,110 employees based in the Southeast. •  Current benefits administration provider •  Cost was:

$100,000 to implement $18.50 PEPM

Details

•  BTR managed the RFP process for the client. •  We selected 5 providers to review. •  The cost of the new provider with better

technology: $30,000 Implementation $7.50 PEPM

$-‐

$200,000.00

$400,000.00

$600,000.00

Current Provider New Provider

Cost Comparison

Annual Total

Per Employee Per Month

ImplementaNon Fee

Review your costs


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Thank You!