copyright © 2015 adp, llc. proprietary and confidential.€¦ · 20 topics of focus: •affordable...
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Copyright © 2015 ADP, LLC. Proprietary and Confidential.
2
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Economic Changes Impacting Your Human Capital Management
Strategy
3
Jamie SchlemmerADP
District Manager
Al JonesMueller Prost
Manager Healthcare Consulting
Our Speakers
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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• 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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Copyright © 2015 ADP, LLC. Proprietary and Confidential.
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Business is changing rapidly.
6
Old Business New Business
What’s Thrown Business Today into a Rapid State of Change?
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Old Business New Business
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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
What’s Thrown Business Today into a Rapid State of Change?
Old Business New Business
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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
What’s Thrown Business Today into a Rapid State of Change?
Old Business New Business
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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
What’s Thrown Business Today into a Rapid State of Change?
Old Business New Business
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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
What’s Thrown Business Today into a Rapid State of Change?
Copyright © 2015 ADP, LLC. Proprietary and Confidential.
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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.
Copyright © 2015 ADP, LLC. Proprietary and Confidential.
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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
Copyright © 2015 ADP, LLC. Proprietary and Confidential.
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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”.
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
Copyright © 2015 ADP, LLC. Proprietary and Confidential.
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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
21
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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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Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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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Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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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Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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.
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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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
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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:
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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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?
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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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Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Copyright © 2015 ADP, LLC. Proprietary and Confidential.
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Copyright © 2015 ADP, LLC. Proprietary and Confidential.
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What should you take into consideration while
evaluating your HCM strategy?
48
Industry Statistics
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
HCM Marketplace Platforms
How It Works? Problems Solved?Who’s a Fit?
Stand AloneServices
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
How It Works? Problems Solved?Who’s a Fit?
TraditionalTechnology
HCM Marketplace Platforms
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
How It Works? Problems Solved?Who’s a Fit?
Business ProcessOutsourcing
HCM Marketplace Platforms
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
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
How It Works? Problems Solved?Who’s a Fit?
PEOOutsourcing
HCM Marketplace Platforms
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56
ADP’s Approach to Business
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Questions??
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Thank you!
Copyright © 2016 ADP, LLC. Proprietary and Confidential.