Better Roads Digital Magazine
Issue link: http://read.dmtmag.com/i/440996
Better Roads December 2014 27 ducing benefi ts to minimum essential coverage and managing seasonal and variable hour employees to reduce the number of potentially benefi t eligible employees. Private exchanges are emerging as a new distribution channel. While most employers have not fi nalized strategies, 20 percent of responding employers are considering private exchanges, and 8 percent have strategies in development. The opportunity to control costs through defi ned contributions while providing greater choice to their workforces (ideally combined with user-friendly technology based tools to as- sist employees with evaluating those choices) is an attractive prospect for many employers. The majority of respondents also indicated that they are likely to promote employee choice, engagement and consumerism as part of their benefi ts strategy. The cost of health care reform is a top concern among responding employers, but many have not mea- sured it. Nearly two-thirds of respondents replied that they have not identifi ed the impact of health care reform. Forty-four percent of respondents replied that they have not specifi cally identifi ed the cost of the Cadillac Tax. While this seems coun- terintuitive considering the signifi cance and attention applied to the costs of health care reform, it demonstrates that employ- ers' focus has, in many cases, been drawn to the immediate compliance needs and administrative diffi culties. Despite the fact that industry consultants have identifi ed the concern over the impact of the Cadillac tax to their clients, lack of employer engagement on this topic might be because employers view the ongoing cost analysis as a "luxury" as compared to the day-to-day administrative requirements demanded of them more. Delays have provided breathing room…but have not affected strategies. Though the announcement of the initial employer mandate delay in 2013 came too late for many employers to adjust their strategies, the majority of survey respondents (69 percent) indicated the announcement did not have a major impact on their benefi t plan decisions. Plan design compliance requirements are being met, but administrative compliance has been delayed. The majority of employers (86 percent) have determined that they have a minimum value plan (defi ned as the plan covering 60 percent of medical costs), but half of respondents have not yet determined the standard measurement (or "look back") periods and safe harbor methods (for purposes of determin- ing affordability). Requirements that involve administrative changes, as opposed to benefi t design and contributions, are more diffi cult to implement and have been delayed. Employers continue to rely on their brokers for strategy and health care reform information. Keeping up with health care reform requirements is no small task and em- ployers are overwhelmingly looking to brokers to keep them informed and up to date regarding regulatory changes. For a downloadable PDF of the full study fi ndings, including charts and graphs of the study's key fi ndings, go to willis.com/ Media_Room/Press_Releases_(Browse_All)/2014/20140609_Willis_ Survey_Employers_Vague_on_Health_Care_Reform_Costs. PPACA Employer Mandate Delayed to 2015: What are the Effects? Now that implementation of the employer mandate for Patient Protection and Affordable Care Act (PPACA) – which calls for businesses with more than 50 em- ployees to provide "affordable quality insurance" that meets minimum standards or pay a fi ne of $2,000 per employee – has been delayed until January 1, 2015, it seems that employers can rest a little easier. However, 96 percent of all U.S. businesses have less than 50 employees, so the employer mandate would not impact them. Out of all the U.S. businesses with 50 or more employees, only about 0.2 percent do not already provide health insurance, according to an Industry Week report. This means the employer mandate delay doesn't have signifi cant ramifi cations for those businesses. However, it does have a considerable effect on taxpayers and is expected to increase the overall cost of healthcare reform. The individual mandate is still slated to begin on January 1, 2014, which requires most Americans (for exceptions see www.healthcare.gov) to at- tain health insurance through a federal, state or hybrid exchange. The federal and state fi nancial burden will be carried by Americans with higher taxes. The employer mandate provision of the law was expected to generate about $10 billion in penalties. What's more, employees whose employers decide not to offer coverage in 2014, will now be eligible to receive federal subsidies to buy individual insurance via state or federal exchanges, add- ing to costs. At publication time, 17 states and the District of Columbia had opted to set up a state exchange, seven were partnering with the federal government and the rest were "defaulting" to federal facilitated exchanges. This puts fi nancial pressure on the federal government, and 24 states have decided not to expand Medicaid as required by Obamacare, according to the report. (For a video report from Fox Business News Network's Peter Barnes on the White House's decision to delay the healthcare law's employer mandate, go to http://video. foxbusiness.com/v/2529135947001/obamacares-employer-man- date-delayed-until-2015/.)For continuing coverage on the new healthcare laws, go to BetterRoads.com.