The federal government has been very busy coming up with new regulations for business finances over the last few months. With new rules on everything from deduction volumes and annual contributions to what really qualifies as a generic, it may seem the task of understanding all the new intricate details and effectively facilitating new plans with existing employees is almost impossible. The first step in the battle is finding out what you need to learn, and then finding the tools to get the needed knowledge.
Healthcare and Tax Reform
So what’s the federal government doing to raise its own bottom line? Asking for more money, primarily, but in the form of legislation meant to help protect workers and businesses in the process. That may appear contradictory and impossible by nature, and it seems to be a little of both when reviewing new policies.
The Patient Protection and Affordable Care Act is well-known (or should be) among HR professionals who have been (or should be) working to get their internal benefits systems ready for pre-set deadlines. Failing to meet these landmarks will result in excessive fines for employers, so understanding the statutes well enough to properly implement them is vital. The feds will certainly be looking for mistakes, after all part of the new plan’s implementation funding will come from money it expects to earn from every business in the nation as the rollover occurs. If organizations don’t live up to federal expectations, they could be hit with a bill for up to $500,000.
Meanwhile, tax revisions for payroll are currently getting batted around. There may soon be increases coming for more than one area of every employee’s bottom line. Medicare and basic income could each be facing at least a 1 percent regular boost in deduction for income higher than $50,000, resulting in a significant difference in withholding for some workers. These changes are not currently in effect, but more substantial cuts could take place if higher taxes are levied against personal or business incomes.
Fortunately for most well-prepared organizations, human resources management systems should be able to handle the changes without incident, so long as HR and payroll remain vigilant during implementation. That’s to be expected of employees always, but with such high stakes, it’s more important than ever.
When it comes to tax breaks, for instance, monitoring incomes over $50,000 is one thing, but making sure that amount is monitored will help payroll staff take off that relief if an employee should cap the $250,000 level, as per federal guidelines.
Job growth is another factor for companies to be wary of in light of changes to payroll deductions. Offering a higher salary may make a position more appealing, and with the Department of Labor showing the unemployment rate staying steadily below 9 percent for more than a year, that pool isn’t getting much filtration besides dredging up the same quality of candidates repeatedly. On the other hand, hiring an employee that adds more to the corporate tax burden could be an unnecessary addition, and could wind up putting that new person in a bad position with his or her own tax filings.
For healthcare reform, it’s best for businesses to try and adopt an employee self-service system to streamline the process. This can help get everyone in the organization on the same page regarding available benefits, while fewer divergent plans simplifies the paperwork for payroll and HR staff. In fact, a digitized system can give HR a leg up on any process, so integrating it into an existing human resources software solution could be the best option available.