Delay of health reform mandate has employers making hard benefit choices
Originally posted July 14, 2013 by Jerry Geisel on https://www.businessinsurance.com
Some employers may offer health insurance despite mandate delay.
Affected employers face some tough decisions on what approach they will take in the wake of the Obama administration's unexpected decision to delay a key health care reform law provision.
Administration officials this month delayed by one year to 2015 the Patient Protection and Affordable Care Act requirement that employers with 50 or more employees offer qualified coverage to at least 95% of their full-time employees or pay a $2,000 penalty for each full-time employee.
U.S. Treasury Department officials said the delay was necessary to give the agency more time to simplify how employers are to file health care plan enrollment information with the government.
That delay is being welcomed by employers, especially those who have not decided whether they will offer coverage to those not currently eligible; or, if they have decided, the generosity of the coverage they will provide.
“This is a rare opportunity where an employer can make a smart and thoughtful decision,” said John McGowan, a partner with the law firm Baker & Hostetler L.L.P. in Cleveland.
Some employers, especially those that already have told affected employees that they will expand coverage, are less likely to reverse course and hold off that expansion for another year.
“If you already have figured out your strategy, you probably will implement it,” said J.D. Piro, a senior vice president with Aon Hewitt in Norwalk, Conn.
For example, Cumberland Gulf Group in June announced that, effective Oct. 1, employees working as few as 32 hours a week will be eligible for group coverage, down from the current 40-hour-a-week requirement.
Employees working 30 or 31 hours a week will be given the option of working 32 hours to become eligible for coverage in the company's self-insured plans. For employees who work less than 30 hours, the company will assist them in finding coverage through public insurance ex-changes.
Through that expansion of coverage, which will affect about 1,500 employees, Cumberland Gulf, a $15 billion Framingham, Mass.-based company that owns convenience stores and the Gulf Oil brand, will be shielded from the health care reform law's $2,000 per-employee penalty, which is triggered when coverage is not offered to full-time employees — those working at least 30 hours per week.
That expansion of coverage will remain on track, said John McMahon, Cumberland Gulf's senior vice president and chief of human resources.
“We are going to continue on the path we have laid out. Our strategy is to create a great place to work and to be an employer of choice,” Mr. McMahon said, adding that the company is getting very positive feedback from current and prospective employees.
Other employers who also have announced plans to expand coverage eligibility, though, may find themselves between a “rock and a hard place,” said Ed Fensholt, senior vice president and director of compliance services for Lockton Benefit Group in Kansas City, Mo.
Those employers “will have to weigh the cost savings by pulling the plug for a year with the confusion and damage to employee relations that would occur,” Mr. Fensholt said.
Employers that do not offer coverage to all eligible employees and have not made final decisions on whether they will expand coverage also face issues.
For example, if they wait until 2015 to offer coverage, they could be at a disadvantage if their competitors decide to extend coverage next year, said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington.
There are other issues for employers not currently offering coverage to consider. By not offering coverage, their lower- and middle-income employees will be eligible for premium subsidies to purchase policies from insurers offering coverage in public insurance exchanges.
Then, in 2015, when the coverage mandate kicks in, the employer could offer a plan that is just rich enough to pass the law's minimum value test, denying employees the government subsidies for exchange coverage they received in 2014.
“Then, you have an employee relations issue,” Mr. Fensholt said.
That issue will be less likely to develop, experts say, if the employees received employer coverage beginning in 2014 and never enrolled in exchanges.
“Some employees will be disappointed. It could be an awkward situation,” said Frank McArdle, an independent benefits consultant in Bethesda, Md.
Still, there are plenty of employers not providing coverage who will decide against offering coverage in 2014.
Employers “may not want to move forward until the dust settles. Some are wondering if the regulations and requirements will actually change during this interim period,” said Michael Thompson, a principal with PricewaterhouseCoopers L.L.P. in New York.
In addition, by waiting, employers will have a better sense of whether Congress will act in the coming months to change the employer mandate, experts say.
For example, prior to the Treasury Department delay, bills were introduced that would change the definition of a full-time employee to those working 40 hours a week — compared with the law's 30-hour threshold — while other measures would exempt more small employers from the requirement to either offer coverage or pay the $2,000 per-employee fine.
While it is difficult to imagine Congress reaching a bipartisan consensus, “anything is possible,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.
8 reasons for employers to keep their PPACA guard up
Originally published July 17, 2013 by Dan Cook on https://www.benefitspro.com
Now that the celebrations have died down over the one-year delay of penalties for employers who don’t meet the PPACA coverage requirements, it’s time to take a close look at what does remain in effect.
The very short answer to the question is that there’s still quite a bit on the books, and that, really, only the teeth have been (temporarily) removed.
Here’s what the national law firm Bryan Cave had to say about which PPACA provisions remain in effect for employers in the year ahead.
1. Summaries of Benefits and Coverage must be distributed during open enrollment for the 2014 coverage period and must indicate whether the plan provides minimum value, as defined under the PPACA.
2. Exchange Notices: Employers must distribute PPACA exchange notices to employees by Oct. 1, 2013, and thereafter to new employees upon hire.
3. Application for Advance Premium Credits: Employers are required to complete a 12-page form entitled, “Application for Health Coverage and Help Paying Costs” when requested by employees who are applying for PPACA advance premium tax credits when purchasing coverage via an exchange.
4. PPACA fees: Patient-Centered Outcome Research Institute Fees (“PCORI Fees”) must be paid in July 2013 (that’s now!). The first Transitional Reinsurance Fee must be paid on or before Jan. 15, 2015. PCORI is a private non-profit corporation that gathers research-based information to assist patients, practitioners and policy makers in making informed health care decision.
5. W-2 reporting: Employers must continue to report the aggregate value of health coverage on Forms W-2.
6. Counting Period for Employer Mandate: Employers that need to determine whether they will be subject to the employer mandate in 2015 (50 or more full-time or full-time equivalent employees in 2014) will need to record employee hours in 2014. It is not yet clear whether a short counting period will be available, which means that employers may be smartest to begin to track hours on a per-employee, monthly basis on Jan. 1.
7. Benefit Mandates For All Plans: Plan design requirements for all plans continue to apply (e.g., maximum 90-day waiting period, no limits on pre-existing conditions or essential health benefits, expansion of wellness incentives, dependent coverage to age 26).
8. Benefit Mandates for Non-Grandfathered Plans Only: Plan design requirements for non-grandfathered plans only continue to apply (e.g., preventive care coverage requirements, limits on out-of-pocket maximums, coverage for clinical trial-related services, and provider nondiscrimination, and for small group health plans, limits on annual deductibles).
2013 MLR Rebate Process Follows Similar Path
Original article posted on https://broker.uhc.com/articleView-11448
The second year of reporting Medical Loss Ratio (MLR) is underway, as required by the Affordable Care Act. All health insurance companies are required to spend a certain percentage of premium dollars on health care claims and programs to improve health care quality.
Individual and small group markets must achieve an MLR of 80%. There are limited exceptions where states have set a higher MLR threshold (Massachusetts and New York). The large group market is required to reach an 85% MLR.
As happened in 2012 with the rebate calculation, fully insured policyholders are grouped in Aggregation Sets according to three criteria: group size, situs state and legal insurance entity.
Small group market size is generally up to 50 average total number of employees (ATNE), but 12 states have elected to follow the federal MLR standard of up to 100, with large group being those with an ATNE over 100. In 2016, all small group markets will follow the federal standard of up to 100.
The process and timetable is very similar to last year’s first Rebate Reporting Year. UnitedHealthcare has conducted its preliminary review and sent an April mailing to select customers seeking Written Assurance as to how they may use a potential premium rebate.
A critical date for brokers and customers is June 1, when the final MLR Rebate Report will be filed with the Department of Health and Human Services (HHS) detailing the states and Aggregation Sets eligible for premium rebate, along with the final total premium rebate payout.
After the June 1 filing with HHS, reports for sales and brokers listing the customers receiving rebates will be available in the mid-June time frame. Rebate checks will be issued in staggered mailings beginning the first week of July, with August 1 the deadline for all rebates to be paid to policyholders.
Policyholders receiving premium rebates will receive their checks with the rebate notification. Their subscribers also will receive a notification that their employer has received a premium rebate.
Rebates will be distributed in the following ways:
- For ERISA plans, in most cases, the rebate will be paid to the group policyholder. The exception to this are those groups for which coverage is terminated at the time of the rebate payment and cannot be located by the applicable issuer. Each group policyholder receiving a rebate will generally have an obligation to use a portion of the rebate to benefit the subscribers of the relevant plan consistent with Department of Labor requirements.
- For Federal government plans, the rebate will be paid directly to the group policyholder as well.
- Non-federal governmental plans, the rebate will be paid to the group policyholder, with the policyholder having an obligation to use the portion of the rebate attributable to the premium paid by subscribers in one of the following three ways:Non- ERISA and non- government plans, the rebate will be paid to the group policyholder provided the issuer received a Written Assurance that the group policyholder will use the rebate according to standards applicable to non-federal government plans (details above). Customers needing to provide Written Assurance were sent a form in April and have until the end of May to return it.
- To reduce the subscribers’ portion of the annual premium for the following policy year for all subscribers covered under any group health policy offered by the plan;
- To reduce the subscribers’ portion of the annual premium for the following plan year for only those subscribers covered by the policy on which the rebate was based;
- Provide a cash rebate to subscribers covered by the policy on which the rebate was based.
Written Assurance forms are “evergreen,” meaning that customers with a Written Assurance on file from a previous rebate reporting year are not asked to complete another one. If customers do not return a completed Written Assurance by the required deadline, we are required by the federal rules to divide any rebate equally among all applicable subscribers.
Unlike last year, there will be no notifications in 2013 to either the applicable policyholders or subscribers if the group was not included in an Aggregation Set that qualified for a rebate.
The insurer notice that will be sent when the rebate is paid to the employer is here:
What hasn't changed for employers in 2014?
Originally posted by Keith R. McMurdy on https://ebn.benefitnews.com
In a move that was generally applauded by employers, the Obama administration announced last week that it would delay implementation of the employer health coverage mandate under the Affordable Care Act until January 1, 2015. The good news is that this gives employers another year to prepare for the so-called pay-or-play mandate that requires employers with at least 50 full-time-equivalent employees to offer affordable health coverage to those who work at least 30 hours a week. The bad news is that it remains unclear what compliance still means for employers.
While the employer mandate is suspended, a variety of key provisions that go into effect on January 1, 2014 remain in play. Subject to any future adjustments, plans are still obligated to comply with a number of specific changes. These include:
- Waiting periods cannot exceed 90 days
- Caps on annual out-of-pocket maximums and elimination of lifetime and annual limits
- Revised Summary of Benefits and Coverage notices and a required notice of availability of exchanges
- Excise taxes and fees, such as the PCORI fee and the reinsurance program fee
While we are awaiting further guidance, and any additional changes, plan sponsors should continue to take the necessary steps to make sure their plans are in compliance. Even though the pay-or-play mandate is suspended, plan sponsors could still be found to have non-compliant plans and face penalties around the ACA. So while you might be able to postpone changes relating to eligibility and affordability, you still have to revise your plan to make sure it complies. This delay only effects who you might have to offer coverage to, not the nature of the coverage that will ultimately be offered.
So employers as plan sponsors should take this delay as an opportunity to focus on making their plans 100% compliant. Consider 2014 a “measurement” year where you can implement those employment structures you might have already discussed to make sure your part-time and full-time employees are clearly defined. Consider this a brief reprieve and not an excuse to ignore ACA completely. Employers might have been given some breathing room on the final due date, but the project still has to be completed.
Used with permission from Fox Rothschild LLP. Keith R. McMurdy is an employee benefits attorney at the firm’s New York City office. To contact the author: kmcmurdy@foxrothschild.com. This Legal Alert is not intended to be, and should not be construed as, legal advice for any particular fact situation.
Majority of employers already PPACA-compliant
Originally posted by Dan Cook on https://www.benefitspro.com
More than half of private companies surveyed about their readiness for the Patient Protection and Affordable Care Act said they were already in compliance with the law.
Moreover, three-quarters of them considered themselves prepared to meet the law’s requirements when they become the law of the land.
That’s the conclusion from a PwC (aka PriceWaterhouseCoopers) survey of 210 large private employers, nearly all of which offer their employees health coverage.
While the survey revealed a modest level of uncertainty among companies about just how they will comply, overall, private employers expressed confidence in their ability to offer employees a health plan that meets the letter of the law.
The PwC survey was conducted prior to the administration’s announcement that it would postpone for a year the penalty portions of the PPACA that apply to large employers.
Highlights from the survey include:
- 56 percent of companies already comply with the PPACA.
- 72 percent say they are prepared to comply.
- 35 percent believe they are well prepared.
- 74 percent say the cost of coverage to employees already meets the 9.5 percent-or-less of household income standard the law will require.
- 70 percent don’t think the act will help them reduce the cost of coverage.
- 58 percent say paying for employee health coverage hasn’t slowed their growth.
The survey revealed that many companies (70 percent) plan to take their own measures to try to control health care coverage costs, including shifting more of the cost to employees. That could lead them to run afoul of the 9.5-percent standard, warned PwC’s Ken Esch, a partner with PwC’s Private Company Services practice.
“Companies that plan to shift more healthcare costs to employees should be careful to calculate whether such cost-shifting could cause the company to fail the PPACA’s affordability test,” cautions Esch. “Companies that offer wellness incentives also should remember to take those incentives into account when calculating the minimum value of their healthcare coverage plans.”
Navigator, broker roles sealed in final CMS ruling
Originally published by Gillian Roberts on https://eba.benefitnews.com
July 15, 2013
The U.S. Department of Health and Human Services remains steadfast in its plan to hire navigators to assist and guide people through their options on the exchanges. It will also maintain a relationship with brokers and agents to provide their own recommendations to people considering or entering exchanges.
The Centers for Medicare and Medicaid Services late Friday released a final rule the navigator program, confirming that the role of navigators will be assistance-oriented and stating, as the group has on numerous occasions, that brokers and agents can be navigators if they choose to do so, but otherwise remain separate from navigators.
“We expect that agents and brokers will continue to play an important role in educating consumers about their health coverage options and, unlike navigators and non-navigator assistance personnel, will also be able to sell consumers health insurance coverage,” according to the ruling.
If brokers and agents do choose to become a navigator, “they would not be permitted to receive any direct or indirect consideration from a health insurance or stop-loss insurance issuer in connection with the enrollment of any individuals or employees in QHPs or non-QHPs,” the ruling states.
In April, Gary Cohen, director of CMS’s Center for Consumer Information and Insurance Oversight, elaborated on this sentiment to EBA: “They are not making recommendations, they’re not selling,” he said of navigators. “Some things are the same; they will [both] provide education and inform people about options available to them. But I think you go to an agent because you want to ask the agent sort of the bottom-line question, ‘What do you think I should do?’ And if a navigator is asked that question they’re going to say, ‘I can’t tell you what to do.’”
"NAIFA remains concerned that consumers will be confused about the limitations of navigators," Robert Smith, president of the National Association of Insurance and Financial Advisors, said in a statement today. "Brokers do much more than sell insurance ... Brokers explain critical differences in plan options and coverage. This may involve substantial research and fact-finding about the client’s needs."
The federal government and states that are operating their own exchanges are expected to release a training portal for both navigators and brokers/agents who plan to aide people on the exchanges. A marketplace timeline provided by CCIIO for the rollout of the Affordable Care Act says that this training will be complete by August. However, CMS officials said Monday that the training portal will be developed now that the navigator ruling is final. They did not comment on timing.
The final rule also establishes that certified application counselors are “another type of assistance personnel available to provide information to consumers and facilitate their enrollment in QHPs and insurance affordability programs,” the rule states.
The National Association of Health Underwriters said this morning that they are still evaluating the full regulation, which is 145 pages. At the NAHU conference last month brokers told EBA that they understood navigators were a reality but are confident that their role, advising people on their options, will remain invaluable.
PPACA struggles to meet make-or-break deadline
Originally posted by David Morgan on https://www.reuters.com
(Reuters) - With time running out, U.S. officials are struggling to cope with the task of launching the new online health insurance exchanges at the heart of President Barack Obama's signature health reforms by an October 1 deadline.
The White House, and federal agencies including the Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS), must ensure that working marketplaces open for enrollment in all 50 states in less than 80 days, and are responding to mounting pressure by concentrating on three essential areas that will determine whether the most critical phase of PPACA succeeds or fails.
"The administration right now is in a triage mode. Seriously, they do not have the resources to implement all of the provisions on time," Washington and Lee University professor Timothy Jost, a healthcare reform expert and advocate, told an oversight panel in the U.S. House of Representatives last week.
Current and former administration officials, independent experts andbusiness representatives say the three priorities are the creation of an online portal that will make it easy for consumers to compare insurance plans and enroll in coverage; the capacity to effectively process and deliver government subsidies that help consumers pay for the insurance; and retention of the law's individual mandate, which requires nearly all Americans to have health insurance when Obama's healthcare reform law comes into full force in 2014.
Measures deemed less essential, such as making larger employers provide health insurance to their full-time workers next year or face fines, and requiring exchanges to verify the health insurance and income status of applicants, have already been postponed or scaled back.
"The closer you get to the actual launch, the more you focus on what is essential versus what could be second-order issues," said a former administration official. "That concentrates the mind in a different kind of way, and that's what's happening here."
But the risk of failure in the form of major delays is palpable, given the administration's limited staff and financial resources, as well as the stubborn political opposition of Republicans, who have denied new money for the effort in Congress and prevented dozens of states from cooperating with initiatives that offer subsidized health coverage to millions of lower income uninsured people.
Any further delay could help Republicans make PPACA's troubles a focus of their campaign in next year's congressional midterm elections and in the 2016 presidential race.
HHS denies that its strategy has changed and insists that implementation continues to meet the milestones laid out by planners 18 months ago.
"All of the systems are exactly where we want them to be today. They will be ready to perform fully on October 1," said Mike Hash, director of the HHS Office of Health Reform.
White House officials acknowledge the approach of the open enrollment deadline has put a greater emphasis on priorities. They describe the strategy as a "smart, adaptive policy" and assert that delayed or scaled-back regulations demonstrate better policy decisions or flexibility with stakeholders, rather than a need to minimize distractions.
No Margin for Error
Advocates point out that the reform, formally titled the Patient Protection and Affordable Care Act and informally known as Obamacare, constitutes the most sweeping healthcare legislation since the creation of Medicare and Medicaid, large successful government programs for the elderly and the low income that also faced fierce political opposition when they were created in 1965. Both required years of work after their launch to refine implementation.
The administration has already delayed or scaled back at least half a dozen health reform measures since last year. These include regulations involving star quality ratings for insurance company plans, the choice of insurance plans for small-business employees and a requirement that state Medicaid agencies notify individuals of their eligibility for federal assistance.
Other efforts that could still be delayed include deadlines for some health insurers to get their plans certified by HHS as well as requirements for how the insurance exchanges provide customer service.
House Speaker John Boehner and other House Republican leaders, warning of a "train wreck", have called on Obama to defer an essential task: the individual mandate, which requires people to have insurance coverage in 2014 or face penalties that begin modestly, but rise sharply by 2016.
But experts say it is the other essential tasks - establishing the high-tech capabilities necessary to process government insurance subsidies and create online shopping and enrollment for consumers - that could be most vulnerable with such a compressed timetable.
"The biggest hurdle is to get the systems up and running," said one health insurance official. "Nothing's happened so far that prevents you from being up and running on October 1. But there's virtually no margin for error."
The administration is working according to an ambitious schedule for testing a technology hub and its ability to transfer consumer data on health coverage, income, tax credits and other topics between federal agencies, insurance companies and states. The hub is already exchanging data between the necessary agencies.
A report from Georgetown University's Center on Health Insurance Reforms says state-run exchanges are on track for a successful October 1 launch and have exceeded federal minimum requirements in some cases.
Failure to have adequate systems in place by September 4, when HHS is due to give insurers final notice about which health plans are qualified to be sold on 34 state exchanges run by the federal government, could delay open enrollment by days or weeks but still allow the law's core reform provisions to take effect on January 1, experts said.
Insurers will have several days in August to review plan data as it would be presented to prospective enrollees in side-by-side comparisons online. The administration also needs to test the system with a wider audience than the IT experts working on the exchanges to make sure they are consumer-friendly.
Michael Marchand, spokesman for Washington's Health Benefit Exchange, said the state's online marketplace had conducted frequent tests with the federal data hub, which had worked well so far. But any last-minute changes to the government's requirements to its operations could throw a wrench into the IT system, he said.
"If you start adding or removing lines of code it could bring the whole thing down," he said. "As you add or take away pieces, you have to re-test from the beginning."
(Additional reporting by Patrick Temple-West in Washington and Sharon Begley in New York; Editing by Michele Gershberg, Martin Howell)
SHRM Research Spotlights Health Care Reform Strategies
Originally posted by Stephen Miller on the SHRM website.
New survey reports detailing how U.S. employers are responding to health care reform were released by the Society for Human Resource Management on June 16, 2013, in conjunction with its Annual Conference & Exposition.
Part one, Health Care Reform—Challenges and Strategies, examines the difficulties that HR professionals are facing and the strategies they are using to handle the new regulations. Part two, Health Care Reform—Impact of Health Care Coverage and Costs, focuses on future health care coverage benefits and expected costs.
In addition, a two-page summary of the survey findings is presented in SHRM Research Spotlight: Health Care Reform—Challenges and Costs.
The research was conducted in May 2013, using a randomly selected sample of SHRM members. The Society received 818 responses, half from members with the job function of benefits and compensation and half with the job title of HR manager or higher.
Increased Costs, Cost-Sharing Expected
A large majority of those surveyed (84 percent) expect their health care coverage costs to increase in 2014. Among these respondents, more than half (55 percent) predicted an increase of up to 10 percent, 19 percent forecast a 10 percent to 15 percent increase, and one-quarter (26 percent) expected an increase of 16 percent or more. Generally, small organizations expect greater jumps in costs.
Most responding organizations (83 percent) are likely or highly likely to pass on higher costs to their employees.
When asked what actions their companies are taking as a result of the Patient Protection and Affordable Care Act (PPACA), respondents mentioned the following:
- HR staff education. Nearly three-quarters of organizations are educating HR staff members through classes (74 percent) or working with legal/benefits counsel (73 percent) to help them understand the health care law.
- Redesigned plans. More than one-half are working with their benefits provider to design a compliant health care plan for 2014 (61 percent) or analyzing the short-term financial impact of the law (60 percent).
- Alternative plan options. More than one-half (56 percent) already offer (37 percent) or plan to offer (19 percent) their employees alternative, lower-premium coverage, including high-deductible plans with health savings accounts or health reimbursement arrangements.
- Self-insurance. Just over half of organizations (52 percent) have fully insured medical benefits. Larger businesses are more likely to be self-insured, as are publicly owned, for-profit companies.
- Spousal coverage. Thirteen percent of organizations have provisions to limit coverage for employees' working spouses, such as applying surcharges or exclusions, and 9 percent plan to implement them in 2014.
- Grandfathered status. About one-quarter (26 percent) indicated they will try to keep a grandfathered health plan, which is exempt from certain PPACA provisions. Fifty-five percent will not maintain grandfathered status, and 19 percent are unsure.
- Staff and hour reductions. Few organizations (3 percent) have reduced or plan to reduce their staff. However, 9 percent have already limited part-time workers to less than 30 hours per week, and another 12 percent plan to do so.
- Resources. To help them comply with reform provisions, employers are turning to their insurance brokers (78 percent), SHRM resources (62 percent), legal counsel (48 percent), consultants (34 percent) and internal experts (20 percent).
Employers up estimated costs of health care reform law
Original article from https://www.businessinsurance.com
By Jerry Geisel
Employers are upping their estimates of how much the health care reform law will increase costs, according to a Mercer L.L.C. survey released June 12.
Two years ago, 25% of employers thought that complying with the Patient Protection and Affordable Care Act would increase their health care plan costs by less than 1%. But now, just 9% of nearly 900 employers surveyed by Mercer expect a cost increase that small.
Similarly, 15% of employers in 2011 expected the health care reform law to increase costs by at least 5%. Now, 19% of employers expect cost increases of at least 5%. In addition, 21% are projecting 2014 health care reform law related cost increases of 1% to 2%, while 18% expect cost increases of 3% to 4%; 32% of respondents said they didn't know the cost impact.
Mercer executives said there are several reasons why more employers are increasing their cost estimates.
“As employers get closer to implementation, they have a better idea of how many additional employees will become eligible for coverage. Some that thought they would cut hours have changed their position on that,” Beth Umland, Mercer's director of research for health and benefits in New York, said in an email.
Under PPACA, employers will be liable for a $2,000-per-employee penalty if they do not provide coverage starting next year to full-time employees, or those working an average of 30 hours a week.
In addition, Ms. Umland said, some employers in 2011 didn't know about the various fees that the health care reform law imposes. For example, employers will have to pay a fee of $63 per health care plan participant in 2014 to fund a program that will partially reimburse health insurers for providing coverage to high-cost individuals. While there was some awareness of the Transitional Reinsurance Program, it wasn't until last year that regulators announced the size of the fee employers would have to pay.
Check out our HCR Central for FREE PPACA Downloads, FAQ's, and compliance news to help you and your company prepare for PPACA requirements that take effect later this year and in 2014.
Health Care Law Remains Deeply Divisive
Original article from https://triblive.com
By Dayton Daily News
David Peabody is apprehensive about the new health care law. Ericka Haverkos is hopeful about it.
These Ohio residents — one the owner of a small landscaping business in Columbus and the other a college student who works part time as a cashier — are emblematic of millions of Americans who next year will have to adapt to the most sweeping changes in the delivery of health care since the establishment of Medicare and Medicaid in 1965.
To Peabody, the law will impose steep costs on his company and force him to decide whether to insure his 65 workers or pay a fine to the federal government. To Haverkos, who says she has a learning disability, it could mean access to a doctor who could prescribe the medication she needs.
All across the nation, millions of people are facing the reality of a new era in health care. Signed into law in 2010 by President Obama and known as the Affordable Care Act, the law will extend health care coverage to more than 20 million of the 47 million Americans without insurance.
“For people who haven't been able to find affordable insurance, they are going to love it,” said Elise Gould, a health insurance analyst at the Economic Policy Institute, a left-leaning nonprofit organization in Washington.
The law's critics contend it's going to frustrate Americans with its complexities, new regulations and blizzard of fees and taxes that they claim will deal a major blow to a fragile economy still recovering from the 2008 financial crash.
When asked to describe how efficiently the law is being implemented, Thomas Miller, a health policy analyst at the conservative oriented American Enterprise Institute in Washington joked: “Coming along just fine. Steady as she goes right into the cliff. Don't mind that iceberg. The Titanic got past it.”
A Kaiser Family Foundation survey in April found that 49 percent of Americans lack the information to understand how the law works. More alarming to the Obama administration, a recent Wall Street Journal/NBC News poll showed that 49 percent of Americans believe the law is a bad idea while just 37 percent call it a good one.
The law extends coverage in two ways. It expands the eligibility for Medicaid, which provides health coverage to low-income people. For those making too much money to qualify for Medicaid, the law offers federal subsidies for families of four earning $33,000 to $94,000 a year so that they can buy their plans through exchanges operated by the federal government or their state.
“I do believe folks underestimated the enormity of this law,” said Kevin Kuhlman, a Washington lobbyist for the National Federation of Independent Businesses. “In order for it to be a success, not only does the government have a massive project ahead of it managing and operating these exchanges, but private businesses also will have to come along and make a lot of drastic changes.”
Haverkos, a student at the Columbus College of Art and Design, said she lost her health insurance more than two years ago when her mother's term on the state Board of Education ended. The health law lets adult children remain on their parents' health plan until age 26, but Haverkos said that's not an option for her.
She said her employer doesn't offer insurance to part-time employees like her. She said she has emergency coverage through the college. Under the law, her insurance through the college will be upgraded if she remains enrolled there.
Supporters of the health care law say people like Haverkos can get access to coverage because government subsidies make the coverage more affordable. Comprehensive coverage would help relieve the symptoms of her persistent allergies and, she said, give her security - a sense of comfort knowing that it's there.”
For some people, the subsidies would amount to considerable savings. According to the Kaiser Family Foundation, a single 45-year-old earning $28,735 a year would pay $5,733 a year in premiums under a typical plan. Using the ACA's graduated scale, which calls for more subsidies for lower-income people, that person would have $3,420 of the premium paid for by the government.
“Those people who have found it very difficult to have access to coverage will find it a good deal,” said Kenneth Thorpe, a one-time senior health official under former President Bill Clinton.
Others are scrambling to determine what the law will cost them.
Many small companies that have not been offering insurance will have to under the new law. That will force some into a choice between providing insurance for their workers or paying thousands of dollars in federal taxes.
The ACA will require a company with 50 or more full-time workers to provide insurance or pay a $2,000 per-person fine for every uninsured worker. The only exception is the first 30 workers in the company are excluded from the fine.
Peabody, who years ago took pride in covering the entire cost of his employees' health coverage, said he now has to calculate what he can afford.
Last year, his company paid $48,000 of the $119,000 in premiums charged by his insurer, with the workers picking up the rest.
Not all of his workers accept the company-provided insurance, Peabody said.
“A lot of people can't afford health insurance,” he said. “That's why they choose not to take it.”
Other businesses are facing similar choices. Jamie Richardson, vice president of White Castle, which has 406 hamburger shops across the country, said his company spent $36 million last year on health coverage for its 5,000 full-time workers. All told, the chain employs about 10,000 people.
Under the new law, White Castle must offer its full-time workers (or anyone working 30 hours or more a week) insurance within 90 days of their hire date. That's a change from current White Castle policy, which offers health insurance to workers six months after they are hired. The company could reduce the number of hours for some workers — as a few companies have said they would do — but the chain said it does not want to do that.
“If someone's full time, we want them to stay full time,” Richardson said. “We don't want people to lose benefits.” He did say the additional costs could mean fewer people are hired.
Opponents argue that adding 20 million into the health care system along with requirements for minimum federal coverage is likely to cause premiums to rise for everyone insured in the United States. By contrast, supporters say the new law will restrain the growth rate of health care because insured people will not be flooding emergency rooms for care.
Jennifer Tolbert, director of state health reform for the Kaiser Family Foundation, said the true costs of the new law will be difficult to calculate.
“For most people with employer-sponsored coverage, the cost of that coverage has been increasing over the past decade,” she said. Determining how much of those costs are due to general trends as opposed to the new law will be “hard to disentangle.”