Source: NorthFulton.com

What does the Affordable Care Act 'Obamacare' do?
Health care law difficult to navigate

by Jonathan Copsey

October 07, 2013

NORTH FULTON, Ga. – With the Affordable Care Act, otherwise known as “Obamacare,” at the center of so much trouble in Washington, there is one thing among all the political-speak that keeps getting lost in the shuffle: what exactly is expected of employers under Obamacare?

Big changes are coming to both businesses and individuals regarding the way they think of health care. Eric Helman, chief executive officer of Continuous Health, has made the rounds recently trying to fill companies in on just what they need to know about the new law. He spoke Oct. 1 to the Greater North Fulton Chamber of Commerce, the same day the insurance marketplaces went live.

“It’s not a right- or left-wing problem.” Helman said. “It’s the law.

“Many human resources departments are overwhelmed with compliance and maintenance issues and lack the tools to provide their fellow executives a strategic perspective,” he said. “Health care reform has transformed employee benefits into a board-level issue.”

Carefully navigating the new rule, benefits and punishments for compliance has suddenly forced companies to take a good look at their health insurance plans offered to their employees.

Between 2005 and 2010, average health insurance costs went up 47 percent, Helman said. With such increases, health care was bound to break sooner or later. As costs go up, coverage and benefits go down.

Thus, there was the need for something to fix it. That’s where the ACA comes in.

“Contrary to popular belief, the health care act is not all doom and gloom,” Helman said. “This is the biggest opportunity in our lifetime for employers to rethink how they allocate compensation dollars to health benefits.”

The ACA has established benchmarks for whom they must cover, what they must offer and how much they can charge for health coverage.

“What is surprising to most people is that these new benchmarks are significantly below what many employers are currently providing,” said Helman.

Companies could also be penalized for offering too meager coverage as well as coverage that is too good, so-called “Cadillac plans.”

One of the main points of the ACA is to get everyone in the country covered in some way. This should widen the pool of people paying into the system and help control costs.

All employees who work more than 30 hours a week for large employers must be eligible for health coverage or their employer faces potential penalties. If their employers do not meet a certain level of coverage, they may be fined $3,000 per employee.

However, the employer does not have to provide affordable coverage. Instead, the workers can seek their own coverage through either Medicaid or the public marketplaces.

Ideally, no worker is paying more than 9.5 percent of their income on health insurance.

For some employers, it may make sense under the law to stop offering coverage to spouses of employees. Recently, Kroger made headlines by doing just this. However, this could end up being better for spouses of low-wage workers because they can now access subsidized coverage in the public marketplaces, Helman said.

“Kroger may have made the most benevolent offer to their employees,” he said.

If the employee’s spouse has coverage from the company, the spouse cannot seek coverage through the insurance exchanges. By cutting them loose, they can now seek subsidized coverage that should save them – and the company – money.

Helman stressed that employers should use Obamacare as a catalyst to create a strategy – look at their options carefully and pick a path they think will work best and stick with it.

“It’s not about which strategy you pick, it’s about picking one and being intentional,” he said.