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Navigating Compliance Challenges with a Professional Employer Organization

Maria Black

Small and midsized business owners today are faced with a host of employment-related regulations including, paid sick-leave laws, changing minimum wage, state and local regulations, and the Affordable Care Act (ACA). To say the HR landscape continues to become increasingly complex for this group of employers would be quite an understatement!

In fact, the ADP Midsized Business Owners Study recently found that 41 percent of midsized employers rank the volume of government regulations as their top concern and 32 percent rank health care reform legislation as their top concern. This is part of the reason why the appeal of Professional Employer Organizations (PEO) has grown considerably over the last few years: Business owners are searching for experts who can help relieve the burden of managing their compliance risk.

For example, Global Kids, Inc., a nonprofit educational organization for global learning and youth development, decided to partner with ADP TotalSource. Having recently doubled in size, Global Kids currently has more than 80 employees across two states and reaches over 14,000 youth and educators each year.  Global Kids selected ADP TotalSource for help with managing HR-related compliance and administrative tasks — including ACA compliance, hiring, and benefit plan design and enrollment.

“ADP TotalSource helps us with a variety of important HR tasks such as onboarding new employees, benefits package offerings, risk management and employment law compliance,” said Gabriel Rivera, Fiscal and HR Manager for Global Kids, Inc.  “Supporting our ACA reporting and compliance requirements has been, perhaps, the most important help that ADP TotalSource has given us.  Filing IRS Forms 1094-C and 1095-C and furnishing the Form 1095-C to full-time employees for the first time initially seemed like daunting tasks, but the ADP team helped us every step of the way and made it simple.”

As 2016 is the first year when applicable large employers (ALEs) — those who employed an average of 50 or more full time employees, including full time equivalents, in the previous calendar year — need to complete and file these new IRS Forms to be compliant with the ACA, I’m not surprised that Global Kids sought assistance.  By working with a PEO like ADP TotalSource, companies are able to benefit from what’s known as the co-employment model.

That model has, at its heart, a simple premise:  The company (our client) retains day-to-day control over management of their employees.  ADP TotalSource, for its part, helps manage HR, employee benefits administration, and compliance with regulations like the ACA.  This includes additional services and assistance with IRS Forms 1094-C and 1095-C as well as a team of ACA experts dedicated to help manage and respond to premium assistance notices from the federal and state health care marketplaces and Internal Revenue Service notices related to the employer shared responsibility provisions.

What challenges are your small or midsized business having with compliance?

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