Health care law makes employers rethink business plans

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FORSYTH COUNTY, Ga. — Dr. Karen Minyard knew even before the Affordable Care Act passed that her workload would be tripled.

Her predictions were right.

Minyard, director and associate research professor with the Georgia Health Policy Center at Georgia State University’s Andrew Young School of Policy Studies, recently shared her years of research and understanding of the complicated health care reform, which affects every American, with local business leaders.

On Oct. 15, a Healthcare Association of Forsyth summit was held to address Rotary Club Lanier Forsyth and Cumming-Forsyth County Chamber of Commerce members on how the Affordable Care Act has business owners rethinking their strategic plans.

The event was sponsored by Children’s Healthcare of Atlanta.

Minyard said some people are more affected by the changes than others and small businesses are no exception.

Those who spoke at the event were passionately opposed to the law. A woman said she was fired by her health care employer because they didn’t want to pay her family’s premium increases. A doctor in the audience said the costs to implement the health care changes at his practice will likely put him out of business.

The new health care law does have some bright sides.

Small employers who have offered insurance to their 25 or fewer low-wage workers were able to receive a tax credit.

“The purpose of this was to encourage them to keep offering insurance,” Minyard said. “That’s something that is scheduled to increase, the amount of tax credit that is allowed to small business over the next couple of years, and then phase out.”

Smaller employers are encouraged to keep offering insurance during the transition, but this credit goes away by 2016.

With the way the law is structured, the size of the firm makes a difference.

The law, which says that businesses that are larger than 50 employees have to offer insurance or pay a penalty, was postponed for a year. Those employers who don’t provide health insurance will be spared penalties, called “shared responsibility payments,” of up to $3,000 until 2015.

“If you offer less than essential benefit, a very high-cost and limited health plan that doesn’t qualify and if your workers go to the health insurance exchange and receive a subsidy, you will have to pay $3,000 for those workers,” Minyard said.

Minyard said these large employers should discuss their best option with an insurance broker.

“This becomes a complicated situation,” Minyard said. “There may be some cases where it makes sense to some of the folks to buy health insurance through the exchange and the employer paying the penalty and maybe offering insurance in a different way.”

The health insurance exchange, which is equal to a store where people can buy insurance, will be based on the federal poverty level.

There are two parts to the health insurance exchange, one for individuals and one for small businesses; however, many users have experienced trouble with the site’s log-in process.

“There are a lot of glitches and it’s uncertain as to whether these are the typical kinds of problems that you have when you start a new complicated website, or if there are more challenging issues related to software and programming,” Minyard told attendees.

Insurance subsidies are available to cover people who fall between 100 to 400 percent of the federal poverty level, Minyard said. Every American will be required to obtain a standard health care insurance or pay a penalty. In Georgia, there are about 600,000 people who make 138 percent of poverty level and would be eligible to participate in Medicaid.

There are a lot of changes. Some are community ratings, instead of risk adjustment premiums, meaning an individual would not be rated based on previous health condition, but rather the cost would be region-based, age or whether that person smokes, Minyard said.

The new patient’s Bill of Rights was summarized for attendees.

“No pre-existing condition exclusion, no lifetime and very limited annual benefit caps, prior approval for insurance companies of rate increases and a mandatory loss of 80-to-85-percent,” she said. “That means the insurance companies must spend, depending on their size and their business, at least 80 or 85 percent of the money they receive on the insurance care of people, as opposed to administrative or for-profit.”

Minyard said that more recent projections say that the cost for the health care reform over the next decade is about $1.6 trillion. The Congressional Budget Office, a nonpartisan arm of Congress, estimates in the first 10 years, the health care bill would reduce the country’s deficit by $143 billion.

“Every group has to strategically change their business plan,” Minyard said. “And that’s true for employers of every size because there are different decisions to be made about this.”

For a more comprehensive nonpartisan understanding of the health care law, visit GSU’s Andrew Young School of Policy Studies site at www.bit.ly/19Na3M6.