The Health Care Act: How Can Small Business Plan Ahead?
By: Melanie Berkowitz, Esq.
To say that many small businesses are unsure about their duties and options under the health care act (also known as the Affordable Care Act, or as health care reform, or Obamacare) may be an understatement.
Earlier this year the government delayed the Affordable Care Act’s employer mandate until 2014. Yet, with the planned opening of the so-called “health insurance exchanges” just around the corner, businesses await final clarification on several outstanding issues that will impact their decisions around the health care act.
In the meantime, a number of recommendations are being repeated over and over by industry experts:
- Understand your business’ vision and core values
- Get educated
- Know your workforce
- Be flexible
Ideally, employers already use these considerations when running a business.
Once a company understands what its needs and assets are in general, they will be ready to apply these decisions to their health care policy.
Think Beyond Healthcare
“The first thing businesses need to do is consider how providing health care benefits will promote the company’s goals and vision — apart from the requirements of the Act,” says Joe Donlan, President of ConnectedHealth. The company has developed an ecommerce health benefits shopping platform (or marketplace/private exchange).
“Most employers want to lower costs, engage employees, improve productivity and remain competitive. The right benefits strategy can do all of those things,” says Dolan.
Putting the priorities of the business first makes it easier to integrate the relevant portions of the health care act into an overall benefits program that is tailored to the company.
“If I have a customer that is in an industry where all the major players offer health benefits, it is likely my client will want to offer them too, even if the Act doesn’t require it,” explains Donlan.
Know What to Know
There are a number of resources that can help employers navigate through the health care act to find the parts that are relevant to them, particularly as they calculate “full-time equivalent” employees.
Judy Bradby, president of health care consulting firm ProHealth Strategies, sees lack of knowledge as the biggest stumbling block to compliance and offers several ways around it for employers.
A private consultant can provide one-on-one assistance in completing employee registrations and communicating with workers. But there are also a number of free resources available online to assist consumers in meeting deadlines and filing the correct information. Some of Bradby’s favorites include:
Health care act general information:
Health care act research:
Once you decide that you will or must offer some sort of health benefits plan to your workforce you can educate yourself about what compliance means to your business. Then it’s time to start putting your strategy into action. “Must do” items include:
- Keeping track of Affordable Care Act deadlines
- Making a list of employees and compile records showing the hours they work
- Mapping out your budget and what you are prepared to spend on benefits
- Ensuring that you provide employees with proper notices in time for open enrollment
- Familiarizing yourself with the insurance exchanges, both for your state and the national exchange
- Speaking to your existing benefits provider, if you have one
Consider New Benefits Options
One significant issue within the health care act that remains unresolved is whether a company’s size will categorize it as a “small group” (which imposes certain requirements on the benefits it provides) and/or subject it to the Act’s employer mandate (which governs whether it must provide benefits at all).
The result has confounded small-business owner Don Fornes, CEO of Software Advice. In a recent blog post, he estimates that his business will see “price increases of anywhere from six percent to 40 percent per employee next year.”
To combat that uncertainty, Fornes is considering converting to a self-funded insurance plan. While such a plan carries greater risk, it may also be the most effective way for smaller companies to gain more control over the type and cost of the benefits they provide.
Another solution for employers is to create a defined contribution plans for their employees. “The defined contribution model can be adapted to almost any sized workforce,” explains Donlan.
“In addition, we will integrate the Qualified Health Plans from the state and national insurance marketplace into our private exchange that employers offer, giving employees the widest variety of choices with full transparency about costs.”
Experts Advise to Remain Flexible
Both Donlan and Bradby agree that patience and a willingness to be flexible are essential when it comes to figuring out the Affordable Care Act.
“Until the law actually goes into effect, we really have no idea how it’s all going to work,” says Bradby. “So the best-laid plans may need to be revised and revamped in the coming months and years.”