It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
Feb. 13--Editor's note: An earlier version of this story incorrectly quoted Katherine Georger in the final paragraph. This is a corrected version.
Remember when a Boise restaurant owner could decide whether servers and cooks got health benefits?
Forget that. All the rules are changing. This fall's insurance enrollment season is only months away, and it will be decision time for many Idaho employers: pay for worker health care or pay fines?
This year is shaping up to be a guessing game, with business people tapping their fingers on the table, waiting for federal rules to trickle out -- and wondering if they can possibly avoid an Affordable Care Act train wreck on Jan. 1, 2014.
A TICKING CLOCK
Uncertainty has been a refrain since the Affordable Care Act was passed in 2010. First, there was the wait-and-see approach that Idaho lawmakers took with the Supreme Court decision and the 2012 presidential election. Those issues are settled.
Now, Idaho and its employers are waiting anxiously for rules and regulations to come out this year dictating what they can and cannot do. Three federal agencies that oversee health care, labor and taxes already have issued hundreds of pages of rules and guidelines under the law. They have loosened some deadlines for states and employers along the way.
Employers with 50 or more full-time equivalent employees must offer health care benefits to full-time workers starting next year.
If they don't, and any of those employees buys subsidized health insurance through an exchange, the employer will be fined $2,000 per full-time employee, except for the first 30 employees. If the plan offered is too expensive, and the worker jumps over to the exchange, the employer can be fined for that, too.
Employers with fewer workers, who make up a large share of Idaho's businesses, will not be fined if they don't offer benefits. If they do, and they're small enough and pay low enough wages, they can claim a tax credit for their costs.
But that's just part of the broad picture sketched by the law. Agencies are filling in the brush strokes. All those tiny dabs of paint are hard to keep track of, so many Idaho employers are taking seminars and webinars, and attending forums.
Brent Nye is the district benefits manager for the Boise School District, which insures about 5,000 people. His biggest challenge right now is that he's not psychic.
Nye is trying to stay on top of developments by attending forums and presentations by local attorneys and his district's health insurer, Regence BlueShield of Idaho. But there's a fog of uncertainty that he hopes will disappear before open enrollments start this fall.
"It's a large barrier, and we're chipping away at it, but we don't know which chip will take the whole wall down -- so [that] we can see the next wall," he says.
"We figured out that our plan has adequate coverage" to meet the large-employer requirements of the Affordable Care Act. His worry right now is: With so many kinds of employees, to whom should the district be offering coverage?
Many of the district's workers put in 20-hour weeks just so they can get benefits. Nye wants to know who else the district must cover. Substitute teachers? Cafeteria workers? Playground supervisors? Part-time employees' family members?
One federal rule for employers caps how much a worker can be charged for health benefits without triggering a fine. It's 9.5 percent of household income.
An employer is unlikely to ask a worker how much their spouse makes. Federal regulators are offering some safe harbors for problems like that so employers don't get punished for having limited information. Nye says many of the school district's part-time workers will blow past the 9.5 percent threshold, since 40 percent to 60 percent of their paychecks may go straight into health insurance for themselves and their dependents.
And it's expected that part-timers will keep their children on the district's health insurance because dependents won't receive tax credits to buy their own plans on the exchange.
"Do we need to be expanding who we're offering coverage to, or are we putting ourselves out there so that we may be subject to a fine?" Nye asks. "When we think we've got something figured out, we find we have three or four challenges."
Employers should worry but shouldn't be terrified, says Katherine Georger, an attorney at Holland and Hart in Boise. She says federal rulemakers seem to understand that employers come in all shapes and sizes and seem most concerned that people make an honest effort to follow the law.
Rulemakers are saying:
-- They'll carve out a safe harbor for employers of 50 or more full-time equivalent workers who offer affordable health insurance benefits. A new rule says employers won't be punished if up to 5 percent of those workers buy through the exchange instead of using the workplace benefits. The spirit of this rule is that "the penalty will not apply in cases where [an employer] intends to offer coverage to all employees but fails to," Georger says.
-- Employers should use W-2 forms to beat that 9.5-percent limit on what employees pay for insurance. "A lot of employers have been baffled and said, 'How are we supposed to determine household incomes when all we see is an individual's W-2 form?'" Georger says. It turns out that might be enough. Employers can be spared fines if they use Box 1 of the W-2 "as a baseline" to determine whether an employee receives health coverage. "They still have to guess, but they're not going to be penalized if they can show that's what they relied on," she says.
-- The government will give future guidance and create a calculator that employers can use to figure out whether their insurance plans offer at least the minimum coverage the law requires. Employers must offer benefits that cover at least 60 percent of employees' costs, including copayments, deductibles and out-of-pocket limits. The Internal Revenue Service and Health and Human Services say they'll help people understand and meet that requirement.
-- Employers shouldn't try to exploit loopholes. Georger says federal regulators are not going to allow large employers to skirt the law by getting creative.
Some examples she cites: splitting up your workforce by creating a bunch of subsidiary companies, splitting up a worker's hours by having a temp agency employ them part of the week, or reducing the credit hours taught by adjunct faculty. The Internal Revenue Service "came down hard on that in the proposed regulations," Georger says.
Idaho's small employers also will have a virtual marketplace to buy insurance for their employees. The tax credit they can claim for buying their workers health insurance goes up to 50 percent starting in 2014, when the small-employer insurance marketplace launches.
"The Affordable Care Act is a complex beast, and agencies that have been tasked with implementing [it] appear at this point to recognize the practical difficulties," she says. "But a lot of guidance is still needed to meet the Jan. 1 deadline."
Audrey Dutton: 377-6448
(c)2013 The Idaho Statesman (Boise, Idaho)
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