Companies enter ACA-rules era despite some delays
Most employers sponsor benefits, absorb impactsFebruary 13th, 2014
Most Spokane-area employers who offer health benefits are continuing to do so, while adhering to new rules this year under the federal Affordable Care Act, industry observers here say.
Meanwhile, some employer requirements are being delayed under the law that’s informally called Obamacare.
New rules include ACA notifications to employees and a requirement that plans include a set of essential benefits. The essential benefits include coverage for emergency services, prescription drugs, maternity and newborn care, pediatric dental, and behavioral health.
Business managers say that while some new rules have started this year, it’s challenging to plan for others that are looming. They also say they are experiencing additional administrative work along with some confusion in trying to understand ACA’s overall impacts.
One provision starting this year requires insurance to be offered to new employees within 90 days of a start date, rather than after a predetermined waiting period set by the employer, says Sheila Leslie, president of Spokane-based security provider Phoenix Protective Corp.
The company provides health insurance to its 300 security workers in Washington state, which qualifies it as a large employer under the ACA. Of that number, 50 employees are based in Spokane. Because some rules are in a state of flux, planning as a business and taking proactive steps are challenging this year, Leslie says.
“We have always offered health care, so we’re not impacted by a new requirement to offer health care,” Leslie says. “The bigger impact is health care was truly a benefit, an incentive, and under the new rules, it’s changing to being a requirement.”
She adds, “Our strategy is to take the most conservative and compliant approach that we’ve been able to learn. The general public thinks employers got a break, but only a few of the things got put off until next year.”
One major ACA rule that was expected this year but delayed until 2015 is a provision called “play or pay” that means employers with at least 50 workers will owe penalties if they don’t cover full-time employees. The rule was set to go into effect in 2014, but the Obama administration pushed back the penalties until next year.
Mark Patrick, a principal with the Spokane-based insurance and employee-benefits brokerage Moloney+O’Neill, says companies should be weighing the ACA’s 2015 impacts now. However, he adds that a majority likely will find it’s still beneficial to offer a health package.
To assist companies, Moloney+O’Neill has a new actuary modeler software program that can help determine play-or-pay options based on a company’s dynamics, he adds.
“We built a modeling tool that builds out a number of scenarios for employers based on, ‘Is my plan affordable under health care reform?’ To qualify, an employer-sponsored plan has to pass two tests. Does it provide essential benefits of a minimum quality? Is it affordable to employees?”
An analysis should compare costs to have a tax-deductible health benefits plan that employees value, against paying a penalty that isn’t tax deductible but might enable lower-wage earners to get more benefit through the public exchange, Patrick says.
“When we run the modeler, we find very few of our clients would be better off canceling a group plan,” he says.
Patrick adds, “I think overwhelmingly employers are going to find there is a small portion of their population who would be better off without a health-care plan sponsored by them. I also think that overwhelmingly most employees are going to find they are still better off with a corporate-sponsored private insurance option without a public exchange, with or without a subsidy.”
In Washington state this year, individuals and families for the first time had access to a new statewide online health insurance marketplace, called Washington Healthplanfinder, but a public exchange option for small businesses didn’t get off the ground in 2014 as expected. Washington Healthplanfinder plans to offer a statewide small business option, sometimes called the Small Business Health Options Program (SHOP), next year.
Bethany Frey, an Olympia-based spokeswoman for Washington Healthplanfinder, says the exchange heard from insurance carriers that they wanted to focus first on individual plan options for the marketplace, because of the large administrative resources required, before providing small-group business offerings there statewide.
However, two Washington counties, Clark and Cowlitz, are expected to have a small business exchange in place this year, through the insurance carrier Kaiser Permanente, Frey says.
The Washington Health Benefit Exchange, a public-private partnership established under the ACA, is operated separately from the state and governed by an independent 11-member board. The marketplace allows people to compare and enroll in health insurance coverage and gain access to tax credits, reduced cost sharing, and public programs such as Medicaid. It began enrolling customers on Oct. 1 for coverage that began on Jan. 1, with an enrollment period extending through March 31.
Washington Healthplanfinder says that as of Feb. 4, more than 88,000 residents had enrolled in private health plans through the state exchange. Additionally, more than 250,000 people became newly covered under Medicaid, called Apple Health in Washington state.