In a December webcast hosted in conjunction with HR.Com, Ceridian's Jim O'Connell's presentation focused on the implications of the U.S. presidential election for compliance change and the need for proactive compliance management using HCM technology. These compliance changes will involve great uncertainty about costs, complexities and risks. Employers can meet challenges, costs and risks with a proactive compliance management strategy based on state-of the-art HCM technology. This blog post recaps the compliance content from that webcast.  

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Ceridian Webinar: From Red to Black

Fri Dec 9, 2016

On December 7th, Ceridian was pleased to host in cooperation with HR.com a special webinar entitled "From Red to Black: Staying Ahead of Compliance Change Through the ROI of HR Technology." The presentation focused on the implications of the U.S. presidential election for compliance change and the need for proactive compliance management using HCM technology.

Capitalizing on what political experts call a “change” election, the new leadership in Washington DC can be expected to break with past policies when devising new compliance-related legislation and regulations.

The outlook for the Affordable Care Act (ACA) is a perfect example of the kind of dramatic change in public policy direction expected in 2017. President-elect Trump and Capitol Hill lawmakers are unlikely to merely “tweak” or “fine-tune” the ACA for the future.  On the contrary, most observers expect fundamental restructuring of the 2010 healthcare reform law.

The Ceridian webinar described the “4-R’s” of change to the ACA in 2017:

  1. Retained: Popular provisions like the ban on pre-existing condition exclusions and others are sure to be retained;
  2. Removed: The remove bucket is likely to include the 40% Cadillac Tax on high-value health plans;
  3. Replaced: Will most likely include the 10-category essential health benefits package that ACA requires in the state or federal exchanges;
  4. Reduced: Could very well be the employer and individual mandates, possibly by waiving penalties for non-compliance.

In any event, President-elect Trump and the Republican leadership on Capitol Hill are not expected to precipitously eliminate health coverage for the 20 million or so Americans who have their insurance as a result of the ACA.

Using a combination of both legislative action via the so-called “Reconciliation” budgetary procedure, which requires the votes of only a simple majority, or presidential executive orders, it’s likely, that the Affordable Care Act, including the employer “play or pay” mandate, will be substantially reformed early in 2017.

To be sure, Trump Administration compliance change will not be limited solely to the Affordable Care Act. Indeed, a laundry list of employer compliance priorities awaits the new leadership in Washington DC.

DOL Final Overtime Rule
The Department of Labor must decide whether to proceed with the appeal of the federal district court’s preliminary injunction stopping the final overtime rule from taking effect on December 1.

Employers are now in compliance limbo as they await government direction as to whether to proceed with steps they have taken to comply with the now-defunct final rule, including reclassifying employees as newly overtime eligible.

President-elect Trump could direct the new Secretary of Labor to drop the appeal and start over again to draft a new overtime rule that would meet the objections raised by Judge Mazzant.

Mandatory Paid Family/Sick Leave
Legislation has been pending in the U.S. Capitol that would create a federal mandate on employers to offer full- and part-time employees up to 12 weeks of paid family or sick leave. The incoming Trump Administration and Labor Department are not likely to endorse this legislation, putting the onus on state and local governments to tailor paid leave policies to local conditions.

Federal Minimum Wage
Pressure has been building throughout the country to increase the federal minimum wage, now $7.25 per hour, to $15.00 per hour. Mr. Trump has called for an increase in the minimum wage, but has recognized that a large increase could adversely affect low wage workers.

This issue is sure to be controversial in 2017 and it is unlikely the new administration will agree to a $15.00 federal minimum. It is entirely possible that Congress will bump up the minimum but allow the states to adjust their minimum wages to reflect local economic conditions.

Tax Reform
The sleeper, though blockbuster, compliance issue of them all would be comprehensive tax reform. President-elect Trump is known to favor tax cuts for middle-income households and corporations but it’s not clear that he would support more comprehensive tax reform.

If such a package comes together in 2017 it could very well include some form of “cap” on the present law tax exclusion for employer-provided health coverage, a major compliance issue for employers.

These and other compliance changes will involve great uncertainty about costs, complexities and risks. Employers can meet that challenge with a proactive compliance management strategy based on state-of the-art HCM technology.