The Hidden Compliance Cost Restaurants Need to Know About in 2015

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Most district managers are aware that restaurants with 50 to 99 full-time employees will need to start providing healthcare to their workers by 2016. What they may not realize is that they need to start reporting on healthcare coverage a full year sooner than that -- whether they’re offering it or not.

As QSRWeb pointed out, employers will need to start reporting on a wide range of data beginning in January in order to remain compliant with the ACA -- and many have no idea.

If this comes as a surprise to you (as it will to many district managers), here are a few salient tips to help you navigate these new requirements and remain in compliance for the coming year and beyond:

1. Don’t Play “Wait and See”

While we now have a Republican-dominated Congress, and many senators and representatives on that side of the aisle are not fans of Obamacare, it’s not a good idea to play wait and see with the ACA. The odds of it being pulled back are quite low since President Obama would have to sign the repeal into law, so it’s a much better idea to go ahead and prepare yourself for its effects on your restaurant. This is definitely a case of “better safe than sorry,” so don’t wait until January to start getting your ducks in a row for ACA compliance.

2. Know What You Need to Report

Now is the time to familiarize yourself with the new requirements and what they will mean for your restaurant in 2015, as they are extensive and detailed. Restaurants with 50 to 99 employees will have to begin reporting on healthcare both to the IRS and to their employees beginning in January.

Employers will need to report on who they provided healthcare to, by both calendar month and social security number. The full requirements are listed here, and this fact sheet from the Treasury should also prove helpful when it comes to understanding your compliance reporting requirements.

3. Use Technology to Your Advantage

The documentation that will be needed for compliance purposes may live in a variety of places, ranging from payroll systems to scheduling software and beyond. That can make it challenging for employers to combine data sources and report on them in an efficient manner.

As Michelle Neblett, senior director of Labor and Workforce Policy at the National Restaurant Association pointed out, "Very likely, additional programming will have to be done internally, or you are going to need to look at current vendors who can help you track this data and report to the IRS. And the longer you wait to do this, the longer time it is going to take to rebuild the data, and the more expensive it's going to be to put the data together come January of 2016."

If you haven’t yet moved to a digital compliance reporting solution like Squadle, now is the time to do so, as it will help you to assimilate all of the necessary information regarding compliance with ACA reporting standards. Cobbling these systems together on your own can be a huge undertaking, and trying to keep track using old-fashioned notebooks will prove headache-inducing and make it difficult for you to remain in compliance.

4. Communicate with Your Employees

Not only do you need to be aware of new compliance requirements for 2014, but you also need to be able to articulate for employees what you’ll be covering for whom, when it will take effect and what they’re responsible for on their own.

Most Americans were required to have some type of health insurance starting in 2014, whether through their employer or a state-run exchange. If your business is covered by the Fair Labor Standards Act, you are and will continue to be required to inform your employees about government-run healthcare exchanges (including informing any new hires on their start dates).

But even if you don’t fall under that umbrella, you’re likely to have many employees who turn to you for information. They may also need paperwork from you in order to apply for tax subsidies for their individually mandated health insurance.

One way or the other, it’s important that you educate yourself on the requirements for both you and your employees and be prepared to offer the information that they will need.

6. Plan Ahead for 2016

Finally, while restaurants with less than 99 employees may not be required to pay for their employees’ healthcare starting in 2015, they will be required starting in 2016. There’s no reason to stick your head in the sand and not prepare for what’s to come, so begin by doing your homework now and calculating the costs that are coming down the pike.

There are a few different options to help you offset the added cost of providing healthcare to your employees, and you should consider implementing them at some point in 2015 to better prepare yourself for 2016.

One choice that some restaurants are currently testing out is adding a small tax to patrons’ bills to help subsidize the cost of healthcare. A restaurant group in Florida, Gator's Dockside, is trying out a one percent tax at eight of its franchise restaurants. Since this amounts to very little on each customer’s bill, it’s unlikely to cause a stir.

Another restaurant out in California, Republique, is asking their patrons to pay a voluntary three percent “tax” to help them offer health insurance to all of their employees. So far, patrons have been willing to pay the small added cost, demonstrating that this may be one potential path that other restaurants can test out in the coming years as ACA mandates take full effect.

While for many restaurants the Affordable Care Act represents a formidable challenge in the form of added costs and paperwork, doing your due diligence ahead of time can dramatically simplify the compliance reporting process for 2015.

Instead of allowing yourself to be blindsided by these “hidden” requirements, district managers should seize the opportunity now to prepare themselves for the next year. In many cases, this means educating yourself, implementing technology and proactively informing your employees regarding healthcare mandates. This way there won’t be any surprises and you can quickly get back to what matters most: serving your customers.

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