Issue link: http://read.dmtmag.com/i/107829
Health Care hard look at self-funding, so they can gain more control over their medical expenses, instead of staying fully insured, where they are simply financing their medical expenses," said Truax. "Then they will want to begin working on wellness programs and other claims reduction strategies to further reduce their medical costs." Kevin Kuhlman, manager, legislative affairs, for the National Federation of Independent Business, based in Nashville, agrees that preplanning is important. "While many of the major provisions don't begin until 2014, employers need to make some decisions in 2013, including what they plan to do in 2014," he said. For large employers, the changes will impact their businesses and their employees more than they will impact their insurance program per se. "With their businesses, they have to provide approved health insurance that may be a little bit more generous than what they offer now, or pay a $2,000 penalty per full-time equivalent employee for not offering coverage," said Kuhlman. This could increase employer costs. Unfortunately, there aren't any good estimates on the impact of Obamacare on premiums costs yet. "The administration just [issued] a statement saying that, because it has kicked many decisions to the state level, it doesn't really know how much insurance premiums will be, and it can't come up with an estimate at this point in time," said Kuhlman. For small employers (under 50 FTE employees), there will be less of a focus on what they have to do and report, and more on issues such as: If we do choose to offer insurance, how much will it cost? What will that insurance product look like? Can we continue to offer what we currently offer? "In other words, these employers aren't forced to offer insurance," said Kuhlman. "However, if they do decide to do so, their costs will be increased, because there are new taxes, mandates and requirements for the kind of insurance that is being offered to the individual and small-group market that don't apply to the larger employers. Again, we don't know how much this is going to cost, but we do know it will more than likely cost more than what these employers currently do offer." As a way to prepare in 2013 for 2014, Benefits Exchange Alliance's Kahle suggests that employers seek a reliable third-party source to conduct a health care reform audit for them, so they can see their entire picture of what they have done in the past, and then create a game plan for the future. "I would recommend a three-year strategic game plan on how you are going to handle health care reform," she suggested. State Exchanges Starting in 2014, according to a U.S. Department of Health and Human Services (HHS) document, "Small businesses can shop in an Affordable Insurance Exchange, a new marketplace where individuals and small businesses can buy affordable, qualified health benefit plans. These exchanges are designed to offer more choices of high-quality coverage and lower prices, and the exchanges will offer a choice of plans that meet certain benefits and cost standards." As such, another challenge of Obamacare for employers is understanding these health insurance exchanges. Each state will decide whether it will participate in an exchange, and there will be charts to identify the multiple levels in the exchange. "As a result, you need to understand what your state is going to do, and you also need to understand the calculations," said Kahle. Other Considerations There are some other, albeit more minor, considerations. Nondiscrimination. Obamacare prohibits most insured group health plans from discriminating in favor of highly paid employees. That is, if you currently offer different plans, eligibility periods, or premium subsidies to different groups of employees, you will likely need to adjust your offerings to comply with the new nondiscriminatory requirements. Automatic Enrollment. In addition, the law requires most employers with more than 200 employees to automatically enroll new employees who are eligible for group health plan coverage. That is, instead of employees having to affirmatively elect health coverage, the default will be for employers to automatically enroll all eligible employees who fail to opt out. Medical Loss Ratio (MLR) Rebates. Many employers will receive MLR rebates from their group health insurance carriers. The employers will then be required to determine whether all or part of the rebate must be refunded to employees or otherwise used to benefit employees. The answer will depend on the language of each employer's plan documents and the structure of the plan premiums. Tax Credits. Under Obamacare, small businesses may qualify for tax credits that make it more affordable to provide health insurance to their employees. According to an HHS fact sheet on healthcare.gov, "If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35 percent (up to 25 percent for nonprofits) to offset the cost of your insurance…Starting in 2014, that tax credit increases to 50 percent." Employee Documentation and Education Between now and 2014, not only will employers need to educate themselves and make decisions for their businesses, they will also be required to communicate much to their employees. (continued on next page) February 2013 | Construction Equipment Distribution | www.cedmag.com | 37 34_Obamacare_Feature_KP.indd 37 1/30/13 3:12 PM