Five health care reform takeaways for businesses

May 9, 2013 By David A. Mann

I spent part of my morning Thursday at a Kentucky Chamber of Commerce seminar on health care reform, which took place at the downtown Louisville Marriott on Thursday.

The event, billed “Can you afford the Affordable Care Act,” sought to inform business leaders about some of the changes brought on by the federal Patient Protection and Affordable Care Act.

Here are a few points discussed at the seminar that Kentucky employers should keep in mind:

• Look at a calendar. In case you haven’t noticed, we’re only about seven months away from January 2014, which is when some of the major provisions of the act are going to be implemented. If you are a business owner and have not figured out what is required, now is the time.

“Contact your insurance representative right away,” said Vickie Yates Brown, co-chair of Frost Brown Todd LLC’s health law practice group. “This is not a time to put your head in the sand.”

Do a head count. The Affordable Care Act’s employer mandate requires that businesses with 50 or more full time employees or full-time employee equivalents provide insurance coverage or face fines.

So figuring out whether you are large employer by that definition is very important, explained Alison Stemler, an attorney in Frost Brown Todd’s employee benefits practice group. Your businesses’ circumstances are important here because there are special considerations such as seasonal employees and leave status that have to be taken into account, she said.

Check your current plan. If your business already offers coverage to some or all employees, now is the time to make sure your offerings match the requirements. Brown noted that there are certain things that have to be covered, such as mental and behavioral health treatments, prescriptions, laboratory services and preventive and wellness services.

And the plan has to be affordable for the employee. That means a premium cannot be more than 9.5 percent of an employee’s annual household income, said Stemler. For more on this, check out the Internal Revenue Service’s FAQs page on the employer mandate.

Do the math. If you do find that you have to start offering or expand coverage, do not automatically assume that it will be cheaper to give up and let your employees fend for themselves. In some of the examples that Stemler showed, giving up can be more expensive because employers have to pay penalties, which are not tax deductible.

Brace for it. The consensus among speakers at the event was that insurance premiums are likely going to rise. There are a lot of reasons behind the increases, said Lawrence Ford, director of government relations for Anthem Blue Cross and Blue Shield of Kentucky. Insurance companies are going to have to guarantee coverage regardless of a person’s health, he said.

And new limits are being place on the factors that insurance companies use to determine rates, such as health status, lifestyle and gender. To subsidize the older, sicker population rates for young and healthy groups, rates likely must increase.

“Are rates going to go up for the young and healthy? Yes,” he said.