The labor and economic climate and the labor market of today have a lot of uncertainty. In today’s soft labor market, compensation and benefits might seem like a non-issue. Small business are struggling to be competitive in the business world and in order for them to do so them must compete to hire those employees that have a high degree of competence, qualifications and knowledge. Rewards strategies have taken on renewed significance for human resources and financial professionals.In addition, sweeping legislative and regulatory changes demand a clear understanding of new healthcare and pension plan administration mandates, tax credits, nondiscrimination, and reporting and filing requirements—and a host of other developments. With the passage of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, a new era in the history of the American health care system has begun. Key elements of the new legislation include incentives and penalties that are designed to encourage employers to offer, and individuals to procure, health care coverage. Additionally, the legislation will create new health care exchanges to purchase insurance, impose mandates on health plans, add new reporting and disclosure requirements, and, of course, levy new taxes. In sum, the new legislation willprovide significant challenges to employers, and the purpose of this alert is to discuss important implications to employers.