From YHB Manager Chris Frye‘s blog, More Than Just the Numbers…


Are You Ready for Healthcare Reform?

Last month, I was fortunate to have the opportunity to sit on a panel hosted by the Capital Area Franchise Association (CAFA). The roundtable discussion focused on identifying practical solutions to respond to the provisions of the Patient Protection and Affordable Care Act (“ACA/Obamacare”). A large crowd gathered at the Tower Club in Tysons Corner to ask questions, seek advice, and vent their concerns over this sweeping legislation that will have a far reaching impact on businesses both large and small. I was joined on the panel by Garry Wilson (AmCareBenefits) and Greg Jones (Bookkeeping Express) who provided timely insight from their professional experiences. Warren Lewis (Ackerman Senterfitt) moderated the discussion and facilitated an interactive discussion between the panelists and an anxious audience.

While we could have debated the issues all day, we were tasked with using the one-hour time period to focus on the items with the most imminent and significant impacts. The following is a short list of items that were of most concern to both the panelists and audience:

Is my organization going to be subject to the “employer mandate?”
Beginning January 1, 2014, organizations that employ over 50 full-time-equivalent workers must provide insurance coverage or face penalties. Penalties could be as much as $2,000 per FTE, excluding the first 30 full-time employees. Employers offering unaffordable coverage (employee share > 9.5% of household income) must pay a $3,000 penalty for each full-time employee who receives a government subsidy to purchase insurance through an exchange. Of great concern is determining the number of full-time equivalent workers an organization employs. This is an onerous calculation that involves an ongoing evaluation of employee work hours and becomes more complicated when seasonal and extensive part time hours are involved. Organizations that are unsure of whether or not they meet the 50 FTE threshold should be proactive in taking steps to determine where they stand.

What will be the impact on employers not subject to the mandate?
While businesses that employ less than 50 full-time equivalent employees are not required to provide health insurance coverage, there are still important factors to consider. Will the absence of coverage cause the organization to lose talented individuals? If coverage is provided, what will be the effect of potential rising costs and their impact on the bottom-line? What steps need to be taken to educate employees on their insurance options if an employer plan is not provided? These are just a few of the pertinent items that need to be addressed.

How will the state insurance exchanges change how I purchase insurance for my employees?
Employers with less than 100 employees will be able to utilize state-run exchanges beginning in 2014 to assist in providing affordable insurance options. Large employers with over 100 employees will not have the option to join the exchange until 2017. Businesses are not obligated to purchase coverage through the exchange, and may continue to provide coverage through their existing job-based plan. If a state opts to not establish an exchange, a Federal government exchange will be established to function in its absence. Currently, the state of Virginia has not established an exchange, while Maryland and the District of Columbia have taken steps to do so. It will be important for employers to evaluate their current plan and compare it against plans that will be available through the exchanges. In recent weeks, the government has delayed until 2015 the ability to provide employees with a choice of plans through the exchanges. Thus, it appears that only a single option will be available for 2014.

Healthcare reform is one of the most polarizing topics in our society today. The sweeping reforms will impact nearly every individual and business in some way, shape, or form. Whether we agree with the changes or not, it is essential that we not ignore the issue in hopes that it will disappear. It is vital that small businesses and their leaders become educated on the law, determine how their organization will be impacted, and put a plan in place to address the issues ahead of the effective dates of the provisions. Strategic decisions include assessing the impact of rising healthcare costs, rethinking your benefits strategy, and employee education. Surrounding yourself with trusted advisors will assist in easing the administrative burden on your organization. Organizations who proactively plan for and successfully navigate the provisions of the healthcare reform will be the leaders in their respective industries in the future.

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