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Posts tagged ‘Affordable Care Act’

K12, ACA, and Outsourcing – Part 2 of a 2 part series

Written by Adam Brittain…
It is not terribly difficult to see why outsourcing has come into consideration as an ACA strategy. Most Districts are not budgeted to offer healthcare to their substitute (or variable hour) workforce, and the Affordable Care Act would require offering healthcare to all such employees working more than 30 hours per week (or pay a penalty). For those districts keeping substitutes in-house, a commonly discussed approach is to limit substitutes to three or four days of work per week. This allows principals and teachers to continue to exercise more control over who gets an assignment, and allows the district to more directly control the employer-employee relationship.
Districts choosing to cut hours for substitutes to ensure they remain under the 30 hour mark must now consider the impact to their students of losing consistent long term substitutes or popular substitutes who have learned the culture and approach of a specific school. As an example, if a popular sub has reached their weekly or monthly limit, the district will have to find another.
This raises the question of continuity in the classroom- if a teacher is out for an extended stretch and substitutes are restricted to three days of work per week- how will student achievement be affected* by not only the teacher’s absence but also the cycling in and out of substitutes throughout that absence? This same logic could apply to those outsourcing- what happens if an agency cannot give a school their preferred substitute?
*In the Journal EDUCATIONAL EVALUATION AND POLICY ANALYSIS June 2008 vol. 30 no. 2 181-200, Harvard University authors Miller, Murnane, and Willett estimate “10 additional days of teacher absence reduce mathematics achievement of fourth-grade students by 3.2% of a standard deviation”.
Districts should avoid applying “either/or” logic when choosing between outsourcing versus keeping the status quo and simply cutting hours across the board. *The concept of avoiding “either/or” decisions is explored in depth in the book Decisive, by Chip and Dan Heath, and it focuses on widening options when making decisions.
For example, districts looking to keep their substitutes and variable hour employees in-house might consider an absence management strategy in addition to restricting hours, as improved absence management tracking often improves overall attendance- which supports greater classroom continuity and reduces the need for substitutes. Also, rather than cutting all substitute hours, could districts use talent management tracking to help identify the portion of variable hour employees who excel at their trade, and absorb the cost of benefits for this smaller group of employees while limiting hours for the rest?
While several ACA strategies may be employed, including better workforce management as a whole or completely outsourcing- which factors will weigh most heavily in the hearts and minds of the decision makers in your communities? How can your district avoid an “either/or” decision and leverage several strategies to help bring ACA compliance within reach of a limited budget?

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K12, ACA, and Outsourcing- Part 1 of a 2 part series

Today’s guest blogger is Adam Brittain.  Adam received his MPA from the University of Colorado-Denver, where he helped launch the state’s flagship welfare fraud program. A former auditor, Adam now serves the public sector as a Principal Consultant at Kronos.

Some school districts are considering outsourcing all teachers’ assistants, substitutes, and other variable hour employees to staffing firms or agencies (agency), while others are just considering outsourcing substitutes. Such controversial measures are being considered as a potential strategy to comply with a controversial law.
Support for outsourcing is mostly financial- for what is advertised as a fraction of the cost of offering benefits, paying penalties, or both- districts can pay a fee to an agency who will furnish substitutes. However, there is a student achievement angle as well, whereby districts choosing to limit substitute hours may see a dip in student achievement when a long-term sub is needed (but their hours are capped). Substitute teacher agencies are outwardly focused on supporting district educational plans and maintaining continuity of instruction of the classroom.
Opposition to such plans varies- but appears to be largely rooted in the human realm, rather than the financial. Variable hour employees are used to getting a specific type of benefit package from the districts they work in, which usually includes more than just the opportunity to purchase health insurance (think retirement, time off when the schools are closed, and working for the same employer as everyone else in the building). Principals may be wondering how easy it will be to obtain a qualified resource when they need it, or whether they will be able to continue to access their favorite substitutes once they have ceded control to an outside firm.
There is, however, more to it than that. Under common-law rules, which have been developed to determine whether an employer-employee relationship exists, employees provided by agencies have largely been considered to be employees of the agency, and not the client. Would school districts be willing to cede their right to personally discharge a substitute who performs unsatisfactorily? The substitute would technically be an employee of the agency and not the school. What if the district wishes to engage a substitute over a long period of time to cover maternity leave? Since duration of relationship is a factor in common-law determination, would this be a consideration for long term substitute assignments?
Also, districts moving to an agency model solely to avoid the implications of ACA may find this strategy backfires, as the district may ultimately be considered the employer (and not the agency), which would land them back at square one.
What are the pros and cons to this approach? How is your district acting to avoid a gut-check reaction to the new regulatory landscape?

Affordable Care Act: Preparing for the Inevitable

Earlier this month, the Affordable Care Act’s spotlight shone brightly on volunteer firefighters. It was a turn for rural cities and towns, who rely heavily on these resources, to stop and say “hey, have we thought this through”. If these volunteers work more than 30 hours per week (in addition to full-time jobs) and were going to suddenly be offered healthcare, how would the costs affect the services provided to the community? Many feared they would have to limit the amount of hours volunteered, but at a cost of keeping the public safe. Luckily, the US Treasury and IRS listened to members of Congress and representatives from the volunteer firefighter’s community to exclude this group.1

This gets me thinking… what else are organizations not anticipating? Things aren’t always black and white. Healthcare Reform legislation isn’t changing, but are there other grey areas for public sector employers that need some special consideration? Now is the time to evaluate and prepare. Even starting with the practice of simple timecard analysis, organizations will know pretty quickly if there are any issues that need to be addressed. Regardless if an employer tracks time manually or through an automated system, they will all be on the hook to report back on their part-time/full-time status. The clock is ticking (344 days to be exact), don’t wait until it’s almost upon us.

1 Treasury Ensures Fair Treatment for Volunteer Firefighters and Emergency Responders under the Affordable Care Act – 1/10/14

Are You Ready for Health Care Reform?

Compared to the historical budget crisis states and local governments have lived with over the last few years, I haven’t seen too many things rattle cages like the trepidation we’re experiencing now with health care reform.  Of top concern are questions about exactly how costly the legislation will be to implement against a backdrop of rising requirements for citizen services.  Government leaders are also trying to get their arms around legislation that is already driving job eliminations and cuts to employee hours on the heels of the staggering job losses that happened during the great recession.  This fear and lack of readiness across all industries compelled the federal government to issue a one-year delay of the employer and insurer reporting requirements, making the “shared responsibilities” requirements effective January 1, 2015.  The decision to push the date may have alleviated some of the pressure employers were feeling. However, it is still imperative that strategic organizations use this extra time to take a more astute approach to how they will manage the imminent changes associated with the ACA.

So how prepared are governments’ current systems/processes in terms of being able to track employee hours and effectively report compliance to the IRS? 

According to a July poll conducted by Governing Institute, 89% of respondents said their current tracking methods could provide visibility into their employee’s part-time or full-time status in accordance with ACA.  Seventy-eight percent said their tracking system could effectively report ACA compliance to the IRS. However, a dive into more specific questions regarding the precise methods used to collect ACA data painted a far less rosy picture.  Seventy-seven percent of respondents admitted they use, or plan to use, paper timecards or Excel spreadsheets to determine standard measurement periods, and a full 51% of respondents said they use manual time and attendance systems to track employee work hours and leave.  Multiplied across entire organizations, manual processes may prove to be a costly and unreliable response to legislation with requirements that are ever-changing and broad in scope.

To download a copy of Governing Institute’s full report entitled, How Will the Affordable Care Act (ACA) Impact Your Government Agency? visit http://www.governing.com/forms/gov-paper-step2-default%20/217150581