How to quickly and efficiently craft the right healthcare policy for your company.
1. ‘Work with the System.’
Whether they agree or disagree with the changes taking place, all Americans will be affected by the Affordable Care Act (ACA). Executives need to know about the changes going into effect so they can make informed decisions for their companies and for themselves as individual consumers.
“There is quite a bit of uncertainty surrounding the implementation of the ACA, and initially, it will be difficult for business owners,” says Patricia A. Mullins, health care defense attorney for Kansas City’s Foland, Wickens, Eisfelder, Roper & Hofer, PC. “The Social Security Act in 1935 and the Medicare Act in 1965 were highly criticized and feared. Ultimately, once they were understood, people were able to work with the system.”
2. Knowledge is Power.
It can be a challenge to find objective information on the Web, so aim for the federal sites first, Mullins says. Healthcare.gov explains in layman’s terms how the new health care insurance marketplace will operate for individuals and families as well as small businesses. The U.S. Department of Health and Human Services website (hhs.gov) outlines the small business health insurance exchanges on a state-by-state basis.
When all else fails, meet with your broker. “Employers in the KC marketplace rely exclusively on brokers and consultants for guidance with their group health plans,” according to Ron Rowe, department vice president, Small Group and Consumer, Blue Cross Blue Shield of Kansas City. “There are many things your broker can help you put in place today which will help ease the transition into the many new requirements coming down the road.”
THE OCT. 1 DEADLINE
“Coming up Oct. 1, there is a notice that has to go to every employee about the exchanges and how they operate,” Kirchharr says. “I think employees are going to have a lot of questions about that, and employers need to have information readily available for their employees to understand what the implications are.”
3. Mind Your Mandates.
Although this portion of the reform was recently pushed back to 2015, eventually individuals and companies alike will face penalties if they don’t have health insurance. If an employer’s coverage is deemed unaffordable, they will be penalized. On the plus side, companies can choose between offering insurance vs. paying the fine and letting employees shop for their own plan in the online marketplace.
“So many business owners were focused on the math problem of it all – ‘What do my benefits currently cost me?’ or ‘What would it cost me if I drop the benefits?’ or ‘What would it cost me if we failed the affordability test?’ But they are missing the key question, which is ‘Where do the benefits place in my overall talent strand?’” says Ted A. Kirchharr, vice president and COO of Landrum Professional Employer Services, Inc. and author of the book, “The Busy Business Owner’s Guide to Health Care Reform.” “Do you need a strong benefits program to attract and retain the employees you require to make your business successful? If you don’t, then you can look into what those penalties will be.”
4. Size Matters.
Employers with less than 25 full-time employees qualify for health care tax credits if they pay at least half of their employees’ premiums. Starting next year, the tax credit will be worth up to 50 percent of employers’ contributions.
Employers with less than 50 full-time employees will use a “modified community rating” to determine the pricing of small employer group health insurance premiums based on the cost of care in that geographic area. They will pay the same premium for employees of all ages and both genders and without regard to health status and health history. As a result, this could “level the rating curve resulting in many groups seeing decreases in their rates while others will see increases,” Rowe says.
Also, part-time employees who work more than 30 hours per week or seasonal employees who work more than 120 days a year will have special rules applied to them.
5. Expect More Taxes.
All health plans will be subject to additional taxes to support the new system. “While these taxes vary from employer to employer based upon their specific situation, in general, employees should prepare for, on average, an additional 4-6 percent in their benefit costs in the form of taxes,” according to Rowe.
“In the short-term, the uncertainty and the likely increased premiums will be difficult to handle, but hopefully temporary,” Mullins says. “Hopefully, the long-term implementation will provide everyone with lower health care costs, lower premiums and better care.”