Copyright © 2015 ADP, LLC. Proprietary and Confidential.€¦ · 20 Topics of Focus: •Affordable...

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Economic Changes Impacting Your Human Capital Management

Strategy

3

Jamie SchlemmerADP

District Manager

Al JonesMueller Prost

Manager Healthcare Consulting

Our Speakers


4

• Economic Drivers Impacting Business

• Regulations Impacting Business

• General ACA

• PBJ Reporting

• Tax Incentives

• DOL Proposed Changes

• Evaluating Technology to Fit Your Business

Today’s Agenda



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Business is changing rapidly.

https://youtu.be/Jr2sJPeoc50?list=PLk--TBHHhUvy7uywuvxU5kOe2ClaDZNhq

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Old Business New Business

What’s Thrown Business Today into a Rapid State of Change?



Sociopolitical/

Socioeconomics

• Muted economic growth in industrial

countries

• Persistently high unemployment which is

increasingly structural in nature

• Continuous private sector de-leveraging

• Large public sector deficits and debt

• Regulatory uncertainty

• Much greater influence of politics on

economics

IMF.org

Forces beyond

our control




Sociopolitical/

Socioeconomics

Forces beyond

our control

Technology

Infrastructure

necessities

needed to

respond

IT systems make it easier for

establishments to execute their

respective functions through:

• Business process automation

• Analytics

• Connecting with the customers

• Productivity tools

SixSigma.org




Sociopolitical/

Socioeconomics

Forces beyond

our control

Technology

Infrastructure

necessities

needed to

respond

Millennials

• The makeup of the global workforce is

undergoing a seismic shift

• In four years Millennials will account for

nearly half the employees in the world

• In some companies, they already

constitute a majority

HBR

New

generation

taking

control




Sociopolitical/

Socioeconomics

Forces beyond

our control

Technology

Infrastructure

necessities

needed to

respond

Millennials

New

generation

taking

control

Social technology

• After years of rapid and increasing adoption, the

use of social technologies has become a

common business practice

• McKinsey’s latest survey on these technologies

indicate that in certain functions, companies are

applying social tools extensively and becoming

more digital organizations overall

McKinsey & Company

Platforms

they rely on




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Changing people in business is the

keystone of successfully adapting.

Copyright © 2015 ADP, LLC. Proprietary and Confidential. 12

1,000 C-Suite

Executives

Q1 2015

Top Internal Challenges

#1 Talent Attraction

#2 Talent Retention

Top External Challenges

#1 The Competition

#2 The Regulator

National Economy

79%

Local Economy

83%

64% 81%

VS. 1 YEAR AGO

Increase in Confidence

Copyright © 2015 ADP, LLC. Proprietary and Confidential. 13

Not

Important

2%

Somewhat

Important

13%

Important

35%

Very

Important

50%

Importance of culture

& engagement

Readiness for

culture &

engagement

16%

Not

ready

38%

Somewhat

Ready

31%

Ready

15%

Very

Ready

GLOBAL

HUMAN

CAPITAL:

Trends 2015

3,300 Orgs

106 CountriesOnly 5% rate their organization’s HR

performance as excellent and just 22%

believe HR is adapting to the changing

needs of their workforce.


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GLOBAL

HUMAN

CAPITAL:

Trends 2015

100

80

60

40

20

0

100

80

60

40

20

0

Very

Important

Important

Somewhat

Important

Not

Important

Very Ready

Ready

Somewhat

Ready

Not Ready

-

2

8-

3

8

-

3

1

-

1

8

-

3

0-

2

5-

2

5

-

2

0

-

1

5 -

1

1

Culture &

Engagement LeadershipLearning

&

Development

Reinventing

HR

Workforce

Capability

HR &

People

Analytics

Machines

as Talent

People Data

EverywherePerformance

ManagementSimplification

of Work


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18%Believe global

economy will

improve in next 12

months 44%2015

1,344 CEO

Interviews THE TALENT

CHALLENGE:

Adapting to growth

68 Countries

2013

ST

EE

P IN

CR

EA

SE

IN O

PT

IMIS

M

ST

EE

P IN

CR

EA

SE

IN N

EE

D F

OR

CH

AN

GE

“But they also know the rules

have changed. Mega trends

including tech development,

geographical changes, and

urbanization are creating

profound challenges for the

future of business and their

workforce.”

DE

CR

EA

SE

IN

CO

NF

IDE

NC

E

66%Felt HR was not very

prepared for

transformational

trends


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Since HR is the management of human capital it is the

mechanism for how a business manages change.


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Turnover

Theft

Absenteeism

Safety incidents

Patient safety

incidences

PROVEN PERFORMANCE

INDICATORS TIED TO EE

ENGAGEMENT“Gallup researchers studied the

differences in performance

between engaged and actively

disengaged business/work units

and found that those scoring in

the top half on employee

engagement nearly doubled their

odds of success compared with

those in the bottom half.”

Customer ratings

Profitability

Productivity

Quality

Towers Watson measures sustainable

engagement, which includes three components:

• Engaged. Feeling attached to the company

and willing to exert extra effort on its behalf

• Enabled. Having the tools and resources to

be successful

• Energized. Working in an environment that

supports one’s health and well-being

According to their 2014 study, only 40% of

employees are “highly engaged”.

https://youtu.be/Sz0o9clVQu8

https://youtu.be/Sz0o9clVQu8


Insight We’ve Gained

60 is the New 40- The quality and innovation of modern

healthcare is extending people’s lives. At the end of 2029, the

last of the baby boomers will turn 65 years old, making 65+

population 71.5 Million.

Shrinking Revenues and Cutting Costs- Changes in

government regulation are forcing a focus on driving operational

efficiency. With the rise in Healthcare utilization, it’s more

valuable than ever that ADP can positively impact P&L in areas

outside of payroll alone.

Watch Your Speed - The evaluation process is critical.

Healthcare contains multiple layers, some can be complex. It’s

critical to ensure the right product or service meets the

organizations timeline in order to successfully execute.

Increased Need for Outsourcing- Innovative cost reduction

strategies are being considered. Some specific healthcare

verticals are seeing the need for more outsourcing than in

previous years, but the overall industry is open minded to new

methods of improvement. For example, senior living

organizations have become great fits for ADP TotalSource and

conducive to complexity in HCM.

Health Care


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Compliance Impacting Your Organization

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Topics of Focus:

• Affordable Care Act

• PBJ Reporting

• Tax Incentives

• DOL Proposed Overtime Changes

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This presentation is not:

• Legal or tax advice

• A political opinion

• The final word on the Affordable Care Act (ACA)

Before taking any actions on the information contained in this

Presentation, ADP strongly recommends that you consult with

qualified legal counsel prior to making any decisions. ADP does not

practice law or give legal advice.

Disclaimer

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Affordable Care Act

Over seven feet and growing…

Increasing Burden of ACA

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ACA – Broad Human Capital Management Impact

• Cost of complying/data modeling

• Fees/fines/penalty assessments & reconciliation

• Certify Annual Health Care Coverage Report 1095-B/C

• Communication

• Employee calls/shared service center

• Reporting

• Compliance communication

• New plans/wellness/rewards

• Calculating look back period (keep data in sync)

• Affordability calculation

• Prepare and distribute new annual report (6055/6056)

• Collecting hours of service

• Integration

• Security

• System updates/change management

• Data recordkeeping

• Reporting

• Receive and reconcile IRS penalty estimates and appeal where appropriate

• Auditing

• Stay current on complex regulations

• Manage regulatory compliance

• Verification of inquiries from Exchanges

• Receipt of notices from Exchanges

• Management of reporting deadlines/ period management

• Administrative challenges

• Staff to meet demands

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Employer “Play or Pay” Mandate Key Terms

• An employer that has 50 or more full-time employees (including Full-Time Equivalents) during the preceding calendar year.

Applicable Large Employer (ALE)

• Full-time employee is one who is credited with service equal to at least 30 hours a week or 130 hours per month.

• A Full-Time Equivalent (FTE) is derived from all part-time and seasonal employees that work less than 30 hours/week or 120/hours/month

Full-time Employee

• Coverage is affordable if an employee’s contribution for single coverage under the employer’s lowest cost plan that provides Minimum Value does not exceed 9.5% of the employee’s household income. Employers may use a “safe harbor” to make this determination based on “W-2 Wages,” the “Federal Poverty Level” or an employee’s “Rate of Pay.”

Affordable Coverage

• An ALE must provide a health plan with at least a 60% Minimum Value. In general, a plan provides Minimum Value if it is designed to pay, on average, at least 60% of participants’ covered medical expenses.

Minimum Value

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Shared Responsibility Decisions and Potential Penalties

Did the employer have, on average, 100 in 2015 (50

in 2016) ACA full-time employees plus full-time

equivalent employees in the prior year?

Does the employer offer minimum essential

coverage (MEC) to at least 70% in 2015 (95%

in 2016) of its ACA full-time employees?

Does the plan provide coverage of at least

60% minimum value?

For lowest cost self only coverage, would any full-time employees pay more than 9.5% of current Box 1 W-2 Wages, Rate of pay, or Federal Poverty Level

The penalty (assessed

monthly) for not offering

coverage is the number of

full-time employees (minus

80 in 2015; 30 in 2016)

times $2,000 annually.

The penalty (assessed

monthly) for failure to

offer minimum value

and/or affordable

coverage is a $3,000

annual penalty that will

be due for each full-time

employee receiving a

subsidy, up to a maximum

of the total number of full-

time employees (minus

80 in 2015; 30 in 2016)

times $2,000.

Penalties do not apply to

small employers.

Those employees

may be eligible to

receive a premium

tax credit to buy

coverage in the

health insurance

Marketplace.

Did at least one

employee receive a

premium tax credit

or cost-sharing

subsidy in a

Marketplace/Exchan

ge?

No penalty payment required.


Forms – 1095-C

EE data from HR

EE data from HR

Benefits data from Offering

Benefits data from Offering

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ACA Requirements Specific To Long Term Care Facilities

Payroll Based Journal Submissions (PBJ Reporting)

Section 6106 of ACA

CMS collecting employee, staffing & census data

Quarterly submissions

Mandatory effective date 7/1/16-9/30/16 (due 45 days after quarter end- Nov 14th)

CMS Audit


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Key Terms

PBJ (Payroll Based Journal)

The PBJ system will collect Facility staffing data and census information

QIES (Quality Improvement and Evaluation System)

This system collects and validates data from designated providers and produces quality measures and other provider reports.

CASPER (Certification and Survey Provider Enhanced Reporting)

This is the application where users may obtain reports about the PBJ data submitted or manually entered into PBJ.

QTSO (QIES Technical Support Office)

The entity that provides technical help desk support for the QIES User ID registration process and the CASPER Reporting and PBJ systems.


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Submission through QIES

Register for CMSnet User ID

Install Juniper

Register for QIES ID

Individuals, vendors, corporate staff will need to register for CMSnet access

Registration began August for early voluntary facilities

Resources

www.qtso.com Access to Online Video Training Resources

www.cms.gov

Getting Started


http://www.qtso.com/

http://www.cms.gov/

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Employee Data

Direct care - nursing, therapy, medical director, pharmacy consultant, activities, dietitian, and social services. Contract services are also included

Administration

Employee ID, hire date, termination date

Unique employee IDs must be created for the PBJ system

– Unique identifier must not include personal information

– Same ID can be used for rehires

• Hire date is the first day paid for working

• Termination date is the last day paid for working

• Exempt, non exempt, contract


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Date of service/work

Hours – only enter hours paid to deliver service

Do not include non-productive hours (PTO, Leave, etc.)

Job Title Code

Reporting should be based on primary role

Job Type Code

Exempt, non exempt, contract

Must indicate if employee is contract or employee

Contract employees – start date is the first date worked and billed for at the facility

Staffing Data


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• Use reasonable estimate for consultants

• Tracking time for contractors/consultants

• Skilled nursing hours only

• 15 job title, 40 labor category codes

• Employees cannot be deleted once hours are saved, only

terminated

Staffing Data


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Census Data

• Record patient count on last day of each month


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CASPER Validation Reports

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CASPER Validation Reports

• Use QIES login

• Listed in ascending order by submission date & time

• Unique numeric submission ID

• Status – accepted, rejected, error message(fatal, warning)

• Fatal or rejected reports are not saved


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• Assess Your Current Systems & Processes

• Questions to be asking

• Key Areas to Focus:

– Payroll

– Time & Attendance Management

– Reporting

– Employee Bandwidth

• Impacts for Non-Compliance

• Solutions

Are You Ready for PBJ?



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Tax Incentive Programs

40

4040

Corporate tax incentives are designed by federal, state, and

local governments to encourage certain corporate activities:


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4141

WA

UT

OR

CANV

ID

MT

AZ

WY

CO

NM

TX

ND

SD

NE

KS

OK

MN

IA

MO

AR

MI

WI

IL IN

KY

TN

M

SAL

GA

FL

OH

WVVA

NC

SC

PA

NY

ME

VT

N

H

RI

MA

C

TN

J

D

E

MDD

C

LA

Top States for Tax Incentive Programs



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Proposed Changes to Overtime Regulations

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• Set the minimum salary required for exemption for

executive, administrative, and professional employees

full-time “non-hourly paid” employees

• Salary level $50,440

– DOL might moderate this down a bit

– Likely to implement automatic annual increases

– Unlikely to allow bonuses to count toward minimum salary level

What is likely to change?


44

What should you do to prepare?

• Pull compensation data

– For all exempts with an annual salary below $50,440.

– Your pull should also include data on bonuses and

commissions.

• Calculate the cost of increasing salary to

$50,440

– Consider lowering incentive pay to offset salary

increase

• Calculate the cost of reclassification

– How many hours are exempt employees are working?

– What is the “cost neutral” hourly rate? Salary?


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What should you take into consideration while

evaluating your HCM strategy?

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Industry Statistics


Approach

Recruiting /

Onboarding

Performance

Management

Learning

Management

Compensation

Management

Payroll

AdministrationHuman

Resources

Time and

Attendance

Benefit

Administration

Pillars of

HumanCapital

Management

Detailed business process evaluation by HCM pillar. Providing

you with your true Total Cost of Ownership, and Data Driven ROI.

Pillars of HCM


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Considerations During Evaluation

• Service & Support

– Facilitate high utilization

– Ability to support your business challenges

• Integration

• Implementation & Timeline

• Reputation


HCM Marketplace Platforms

Your Employees present many opportunities and challenges,

how you manage your employees has a significant impact on

your organization. Today there are 1000’s of vendors to

choose from when it comes to employee management. Despite

the large amount of options, each vendor can be categorized

into 1 of only 5 platforms.

PlatformOptions


Provides stand alone

solutions to compliment

their current infrastructure.

Tax filing

Banking

UCM

Employee Self Service

Pay Cards

Government Tax Credits

COBRA

Companies are able to

better address the

growing changes to

compliance.

Increased Expertise

Time and Cost Savings

Companies that have

elected to keep these

functions “In-House”

Specific Verticals /

Industries

Organizations that

leverage an ERP system


How It Works? Problems Solved?Who’s a Fit?

Stand AloneServices


Outsourcing

Integrated HCM Platform

Payroll

HR & Benefits

Time and Attendance

T&E

Performance and Talent

Management / Recruiting

Analytics

Standardization

Accuracy

Visibility

Time / Cost Reduction

Vendor Consolidation

Compliance

Scalability

Security

Companies looking to

automate, integrate and

outsource manual and

tactical functions.

Equip talent with tools


TraditionalTechnology



Outsourcing combined

with shared accountability

through specialized

service.

Assurance of the

utilization, execution and

maximization of value

points listed under the

“technology” platform

Increased speed to scale

Mentorship, guidance,

overnight transparency

environment for HCM

Maximize technology

investment

Limit need for additional

HR Staff

Cost reduction across

TCO

Significant increase focus

on business strategy vs.

HCM administration

HCM better aligned as a

strategic partner to C-

Suite

Experiencing rapid

growth.

Companies going through

a spin off or divesture.

Limited staff or bandwidth

and in need of change.

Heavy internal staff and in

need of change

Companies that have

outgrown a PEO

Partake in equity

partnerships [VC or PE]

Experiencing mergers or

acquisitions


Business ProcessOutsourcing



Outsourcing combined

with co-employment to

achieve shared

accountability and liability

for employee relations

Fortune 500 caliber

benefit package

EPLI coverage

Shared Responsibility risk

aversion

Unemployment Claims

Management

Same as BPO Plus:

Instant Fortune 500

benefits package, perks,

administration, protection

guidance

Buying power for

insurance [major medical,

P&C, Workers Comp,

SUI, 401k, Dental, Vision

Multiple States/locations,

Increased HR

Compliance/Administrative

needs

Struggling to find

competitive and affordable

major medical health

coverage and operate an

organization with a middle

to low risk MOD


PEOOutsourcing



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ADP’s Approach to Business


https://youtu.be/d64RZnJOzAM?list=PLk--TBHHhUvy7uywuvxU5kOe2ClaDZNhq

https://youtu.be/d64RZnJOzAM?list=PLk--TBHHhUvy7uywuvxU5kOe2ClaDZNhq

Questions??


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Thank you!


Copyright © 2015 ADP, LLC. Proprietary and Confidential.€¦ · 20 Topics of Focus: •Affordable...

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Transcript of Copyright © 2015 ADP, LLC. Proprietary and Confidential.€¦ · 20 Topics of Focus: •Affordable...