Compliance Expertise Delivers Savings, Enhances Benefits Plan (case study)
||Quick Service Restaurant Franchise
||80 locations, multiple states
||Limited Liability Corporation
One of the largest franchisees of quick-service restaurants found itself concerned with benefits compliance and cost associated with the Employer Mandate of the Affordable Care Act (ACA). The company offered health care benefits to management only and a mini-med product to non-management. Rollout of enrollment materials to multiple locations and a large percentage of primarily Spanish-speaking staff also posed a real concern.
CBIZ Employee Services Organization determined that meeting the ACA mandates by offering the management plan to all existing employees would expose the company to over $2M in new financial liability. If no benefits were offered, the penalty and tax would exceed the cost for the coverage.
Acknowledging the typically high staff turnover in the industry (75%-150%) that triggers the variable hour employee provisions of the law,
the CBIZ ESO team introduced a Minimum Essential Coverage plan to newly eligible employees at a cost of 300% less than the typical management plan, protecting the company from the $2,000 penalty per employee and protecting the employee from the individual mandate. Additionally, over 50% of their newly eligible population earned minimum wage and qualified for Medicaid coverage thus mitigating the company's exposure.
CBIZ ESO helped the company reduce liability by $1.8M, save $150,000 by consolidating medical carriers and incorporating an HRA, and add Telemedicine to enhance employee engagement in the plan. To manage the enrollment process, the CBIZ ESO team included a Spanish-speaking telephonic enrollment option with availability to satisfy the various time zones, resulting in the hiring of a bilingual HR employee to assist staff with documentation translation.
Achieve Savings, Enhance Employee Benefits
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