Think hard before your
drop insurance entirely
Tambe said that might not make good business sense despite some
companies might be tempted to abolish insurance benefits completely and let
employees go to marketplaces to get coverage.
The problem is insurance purchased on the marketplace will be more
expensive for individuals. Then the company
will risk talent leaving the company for a competitor who offers them the less
expensive option if the company isn’t willing to compensate by raising their
salary.
“It may work to keep costs down but you’ll have a hard time keeping
talented folks,” he said.
Other federal programs
could help you
For households making under 400 percent of the Federal Poverty Level,
the ACA grants subsidies available on the public marketplace under certain
circumstances.
Additionally there are current efforts for Ohio to spread out the
Medicaid program to households making less than 138 percent of the poverty
level. This in turn if acted out would
make more people eligible for those programs.
Not all individuals will qualify for subsidy even though most Americans
will be eligible to obtain coverage through the exchange. Employer-sponsored coverage may affect an
employee’s ability to meet the criteria for the subsidy.
If there are many employees qualify for federal assistance, it will be
reasonable to let them use those plans, particularly since employees being
offered insurance by an employer aren’t allowed onto the marketplace if their
employer is offering insurance deemed affordable, or 9.5 percent of their wage
rate based on 130 hours per month for single coverage.
“A lot of folks qualify for these things, and there’s no penalty to
employers,” Tambe said.
Know the paperwork
There are a number of new requirements employers need to be aware of in
order to remain in compliance under the ACA. For instance, all employers are
required to provide notices to new hires and current employees about the health
insurance exchanges before Oct. 1.
Tambe said the fines for failure to comply can be steep. For example, if
an employer fails to provide employees with an SBC, the potential penalty to
the employer is $1,000 per employee per day.
There are also requirements that employers provide Summaries of Benefit
and Coverage (SBC) to each employee 30 days prior to their renewal and 60 days
in advance of any material changes to their plan outside of their renewal.
Avoid community ratings
Effective at renewal in 2014, one of the more substantial changes for
employers with less than 50 employees is the new rating structure, Community
Rating. Community rating will need health
insurance companies to give out health insurance policies to all people in an
area, at the same price and without medical underwriting, in spite of of their
health status.
Under this new structure, most groups will see a substantial increase in
rates by as much as 30 percent to 50 percent, he said. A strategy that Tambe is implementing for some
of his clients is to renew their current group plan Dec. 1, 2013, which will
allow them to maintain their current rating structure rather than immediately
moving to community rates.
Consider how you want
to grow long-term
Industries, if not all, some, like food service industries, retail, and
those with large unskilled workforces have traditionally employed large numbers
of part-time employees. These industries
may have to adjust workforce toward larger numbers of part time workers in
order to avoid the requirement of providing insurance to full time workers,
Mullins said.
“Maybe you’ll have to consider hiring a few extra part-timers to get
your people under 30 hours,” he said.
Tambe also said the rules are different for companies with under 50
employees compared with those employing more than 50, which should also factor
into business growth plans.
Controlled groups
beware
A controlled group must provide the same benefits to all of the employees
in all of the companies. This companies
are defined by the Internal Revenue Service as multiple
corporations connected to a single parent corporation through stock ownership.
Failure to do so could be considered discrimination, and land those
companies an IRS audit, Tambe said.
Take a look at self
insurance
More companies, particularly smaller companies, have been looking into
self insurance, and some providers are now offering self-insured options for as
few as 15 lives, Tambe said.
Here is how it goes, in a self-insured product, the employer pays all
employees’ minor health costs out of pocket, and buys coverage only for major
expenses only, “major” expenses defined in the range of more than $50,000 for
an individual, or more than $500,000 for the whole company, although there’s a
wide range of policies companies can buy.
Tambe said it can be a risk, but if employees are generally healthy,
chances are companies will save money.
Build a team of experts
Ultimately, Tambe said there is no single strategy for navigating the
ACA. It will affect companies differently depending on their industry, size,
and workforces.
Tambe said it’s important for employers work with a knowledgeable and
trusted advisor to come up with a long-term plan for their companies.
For that reason, he said professional employer organizations, or PEOs,
have been a popular option for employers to outsource the responsibility for
ACA compliance, as have using temps.
“For any one employer trying to do this, it’s going to be a whole lot of
work for HR,” Tambe said.
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