July 05--Business owners who waited to see how the U.S. Supreme Court ruled on the Affordable Care Act before doing anything might want to get busy.
In many cases, they'll need expert help figuring out what to do.
Last week, the high court upheld virtually all of the health care law. Many of the law's provisions don't kick in until 2014. But local businesses said there are a lot of choices to be made before then.
Is it more cost-effective to pay for insurance for your employees or pay a government penalty? Even if it would be less expensive to pay the penalty, do you need to offer insurance to recruit the right employees?
How many of your employees will earn too much to qualify for subsidies to buy insurance through an exchange established by the state?
What to do about part-time employees who work enough hours to qualify as full-time equivalent?
And, with some contending that the law will not significantly reduce insurance premiums right away, what else can your business do to keep health care costs down?
Many employers are just starting to sift through the details, said David Black, president and CEO of the Harrisburg Regional Chamber.
Even though some Republicans, including presumptive presidential nominee Mitt Romney, are talking about repealing the law, business owners don't want to wait for what might be a long shot.
"Most businesses are where they were when it originally passed -- what is this going to cost me?" Black said. "What am I going to need to accomplish to be compliant with this law? Local governments are going to be in the same situation. This just isn't about businesses. It's about anybody who provides insurance to anybody."
Sutliff Chevrolet President John Hickey used to work as a health care attorney. He sits on the boards of PinnacleHealth System and PinnacleHealth Hospitals. Shortly after the court's decision, his in-box was bombarded by analysts and pundits telling him what it meant.
And yet, he said, "I really don't know enough to know what it will cost our business. ... My head is swimming a bit."
Sutliff Chevrolet provides insurance for its 130 employees, but Hickey isn't sure if that alone will satisfy the new mandate. The company provides its employees with an amount of money and lets them choose the best plan for their family -- a practice Hickey said is competitive in the industry.
Is that good enough?
"I'll probably need expert help with it to know if the plan I currently offer is compliant with all aspects of the law," Hickey said.
As they plan for the coming years, more and more business owners will wind up sitting down with people such as Kevin Krause, the chief operating officer of AIA Benefit Resource Group, which helps tailor insurance plans for employers.
Since the health law was passed, Krause has encouraged his clients to plan as if it will be fully implemented. Even with a repeal vote scheduled this month in the U.S. House of Representatives, Krause said it's smarter to proceed as if the law will go into effect.
The biggest choice a company has to make -- especially one that doesn't provide health insurance -- is if it is worth buying coverage for all employees. Businesses with 50 employees that don't provide health benefits worth 8.5 percent to 9.5 percent of a person's income will have to pay a penalty beginning in 2014.
For some businesses, it would make more financial sense to just pay the penalty, Krause said.
That could be especially true as provisions kick in that could make buying group coverage more expensive, such as coverage for everyone with a pre-existing condition.
Employers also have to consider how much their employees earn. The law will create state-level exchanges where individuals can buy insurance. People making up to 400 percent of the federal poverty level -- about $88,000 for a family of four -- would receive subsidies on a sliding scale toward coverage.
In some cases, it could be cheaper for a business to pay the employee a little more but let him buy insurance through the exchange with the government subsidy, Krause said.
These aren't all economic decisions.
Health care is often seen as an important benefit. For many businesses, not offering insurance, even if it makes financial sense, might make it harder to attract and retain quality employees, Krause said.
But businesses shouldn't be thinking just about insurance, Krause said.
The law doesn't touch one of the real drivers of health care cost: the often unhealthy American worker.
If a company wants to lower its health care costs, it needs to consider a wellness program that specializes in targeted clinical initiatives, Krause said.
It can't just be walking or a gym membership. It needs to engage people with high-cost medical problems such as obesity and diabetes, and help them manage their diseases.
"If we don't get those people under control, they're going to cost us much more than the average person," Krause said. "We have to find a way to get to the people who need help the most."