All employers, both large and small, are concerned about the rising cost of healthcare. It is the belief of many that the Affordable Care Act will ultimately resolve both the issue of affordability and availability. Yet, there are others who may very well represent the majority of business owners, who suggest that the Affordable Care Act was designed and implemented in haste, providing broader benefits to a greater population of U.S. residents without, first, driving at the triggers to cost in our American healthcare system.
Fortunately or unfortunately, the debate about the Affordable Care Act will not be resolved for quite some time. In the interim, it is probable that health insurance costs will continue to rise. For this reason, every employer needs to work closely with their professionals to monitor the impact of the Affordable Care Act on their health insurance costs, and remain informed about creative options, including High Deductible Plans and Self-Insurance.
For small employers, the new Health Insurance Exchanges set to be operational by 2014, may present yet another option. These Exchanges remain ill-defined and their ability to improve the group benefits shopping experience is questionable given the complexity of the product(s) and the question of who exactly will be engaged or employed by government to help field inquiries. Fortunately, many insurance professionals have built Healthcare Advocacy teams to assist in the navigation of the new Exchanges.
In the next several years, there will be many changes to our healthcare system, including a laser focus on wellness, primary care delivered by nurse practitioners, reductions in costly screenings for low-risk individuals, new challenges to medical treatments, shifting providers, and more. Human Resources and Benefits Coordinators need to be prepared to communicate these changes and manage the ‘emotionally charged’ aftermath.
With all the changes anticipated, some good, and some bad, the following are particularly noteworthy:
- Through 2013, businesses with fewer than 25 full-time equivalent employees, which pay average annual wages below $50,000 and provide health insurance, may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset the cost of insurance.
- Starting in 2014, the small business tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses.
- Under the Act, employer-based plans that provide health insurance to retirees ages 55-64 can get financial help through the Early Retiree Reinsurance Program, which is designed to lower the cost of premiums for all employees and reduce employer health costs.
- In 2014, small businesses with generally fewer than 100 employees can shop in an Affordable Insurance Exchange. These Exchanges are designed to create a new marketplace where individuals and small businesses are guaranteed health plans regardless of medical history. Health benefit plans must meet certain benefits and cost standards to be available through an Exchange.
- Employers with fewer than 50 employees are exempt from the Act’s employer responsibility provisions, which assess a penalty on larger businesses that fail to insure their employees in certain circumstances.
- In 2014, businesses with 50 or more full-time employees will generally be required to offer adequate health insurance or pay a penalty assessment.
- Businesses with more than 200 full-time employees will have to automatically enroll new employees in their health insurance plan and provide an opportunity to opt out of coverage.
At Setnor Byer Insurance & Risk, we are committed to guiding you through the next several years of change. Check back with us often for updates on the American Healthcare System and the Affordable Care Act by calling us directly at 1-888-253-8498 or by emailing specific questions to HealthAgents@setnorbyer.com