By: Melanie Berkowitz, Esq.
Call it a tax, an exercise of power or a mistake; just don’t call it unconstitutional.
With the Supreme Court’s decision to uphold the individual mandate in the Patient Protection and Affordable Care Act (ACA), over two years of uncertainty about the future of healthcare bill finally came to an end.
And where uncertainty ends, work begins for the thousands of businesses, health care providers and insurers who have held off making decisions about how to comply with the ACA’s many requirements while they waited for the Court to act.
“Employers need to understand that compliance with the ACA involves more than filing a few reports and auditing your company’s health insurance practices,” says attorney Harry Nelson, managing partner of health care law firm Fenton Nelson.
Nelson says that the healthcare bill will require a real culture change for many businesses, and that takes time. “2014 is really not as far off as you think, and employers who are not preparing now are going to find themselves falling short when the full law goes into effect.”
Are you unsure as to what exactly you should be deciding? Aon Hewitt, the global human resources business arm of AON reports that it expects employers to focus on compliance, communication with employees and strategies to combat rising health care costs.
In other words, under the new healthcare bill, nearly everything having to do with how employers provide health benefits to their employees must be reviewed, questioned, and possibly amended -- by 2014.
So what do you need to do now?
1. Determine How the Law Applies to Your Business
A quick internet search results in dozens of explanations of the key provisions of the law. In his article on the Supreme Court decision, Monster senior contributing author John Rossheim points out a particularly helpful summary that breaks down each provision of the law by year of implementation.
If you want your information directly from the government, take a look at the Department of Health and Human Services’ interactive timeline to learn when your business will need to implement the various aspects of the law.
2. Understand the Employer Mandate
No matter what other provisions of the ACA do or do not apply to your business, you must understand the employer mandate and what it says about the type of health insurance you must offer your employees.
“Do not assume the mandate does not apply because you expect your current health plan to be grandfathered,” warns Nelson, “There are a number of questions about what it will take to retain grandfathered status.” Having it, adds Nelson, “does not mean a free pass from compliance with the entire ACA.”
Under the Affordable Care Act, employers with fewer than 50 employees may not be required to provide healthcare, they may wish to do so to take advantage of available tax credits and improved small business growth opportunities.
Still uncertain what your risks are? Take a look at Kaiser’s flowchart to help you figure out exactly where your company falls.
3. Make Decisions About Insurance
“One of the biggest questions employers now face will be whether to continue their health care plans, and at what level,” reports Douglas Johnson, President of Indiana-based benefits provider JA Benefits LLC. “New eligibilities for private as well as state and Federally-sponsored insurance exchanges will radically reformulate this decision-making process.”
Nelson agrees. “Many employers expect to see a sharp spike in health insurance costs as soon as all of the ACA’s requirements kick in and many more individuals are covered.”
Only time will tell if insurance exchanges and other cost-containment strategies actually work, adds Nelson. “I expect to see employers struggling with decisions about what their insurance plans will look like going forward.”
Specific decisions employers will have to make include:
- How to analyze the costs and benefits of keeping an existing “grandfathered” health plan (and avoiding certain compliance requirements) versus implanting a new health benefits plan.
- Whether to seek group health insurance for your employees through an insurance exchange.
- What to do about a health care for your retirees.
- How to take advantage of potential cost savings by offering a qualified employee wellness plan penalizes workers who do not participate.
4. Know What to Report
A significant part of the ACA involves what employers must report to the IRS and other agencies about the health insurance they provide for their workforce.
For now, employers should ensure that they have procedures in place to capture and retain employee data and then organize it into a usable format that can be reported to the government.
5. Communicate With Your Workforce
The “culture change” Nelson predicts for many organizations will be easier for both management and workforce to swallow if employers make an extra effort to educate and inform their employees what to expect. The ACA makes changes to employees’ flexible spending accounts, prescription reimbursement, preventive care, overall healthcare costs and more.
Employers are required to provide their health plans’ detailed summary of coverage to workers and also report the cost of the insurance on employees’ W-2 forms.
6. Make Strategic Staffing Decisions
All of this decision-making, reporting, communicating and complying can take a toll on employers. It is time-consuming, complicated, and mistakes can be costly.
Opportunities for companies that provide recordkeeping, benefits management, data collection and other services are enormous. Mid-size companies may find it advisable to outsource many of these functions while larger businesses may add to their HR staffs to manage the workload.
And if your business happens to be in the health care sector, your responsibilities will grow even more, but so will your healthcare staffing opportunities.
“Compliance services is going to be an exploding industry,” predicts Nelson. “The ACA creates dozens of requirements regarding training, recordkeeping, reporting, care management and discipline for health care businesses of every size and shape. In my business, I am already seeing an enormous need for expertise to help employers manage all their obligations under the law.”
The ACA is complex, but it can be mastered. Employers do not have a choice about whether to comply; those that embrace the challenge are likely to be the most successful.
AON Hewitt Americas Health & Benefits practice director John Zern puts it another way when discussing the company’s reaction to the Supreme Court’s decision: "The ACA provides employers an opportunity to redefine their role in health care and create a comprehensive health care strategy in 2013 to reflect this role."
Legal Disclaimer: None of the information provided herein constitutes legal advice on behalf of Monster.