Pittsburgh-area employers ponder Obamacare changes

Jan. 12--With the prospect of repeal and replace drawing closer, Pittsburgh-area employers seem to be anticipating a promised rollback of the Affordable Care Act with equal parts relief and anxiety.

A recent survey indicates employers would welcome the undoing of some administrative burdens and fees created under the ACA. But facing yet another major health insurance detour has them on edge.

"There seemed to be a sense of acceptance [of ACA regulations] and now there's ambiguity again. Now we don't know where it's going to go," said Jessica Brooks, CEO and executive director of the Pittsburgh Business Group on Health, whose members include some of the region's largest employers.

While no one knows with certainty how soon the changes will arrive -- and President-elect Donald Trump indicated Wednesday that it could be sooner rather than later -- there's no doubt that employers have a big financial stake in the outcome. Mrs. Brooks noted that, collectively, U.S. employers provide health coverage for more people than Medicare or anyone else.

As the debate on ACA's future continues, she said, "It would be beneficial to have a voice, or at least consideration" of employers' perspective.

That perspective includes finding relief from the tangle of Affordable Care Act regulations and requirements, among them the employer mandate that requires larger self-insured employers to offer and document, under threat of penalty, that the coverage they're offering is adequate and affordable.

In a Pittsburgh Business Group on Health member survey last fall, 71 percent of employers responded that they found the reporting requirement "somewhat" or "extremely" challenging. The business group has 92 members. The survey had a 47 percent response rate.

Other regulations have hit employers in the pocketbook.

Besides the 40 percent Cadillac excise tax on rich health benefit packages set to take effect next year, employers also pay a fee for each covered employee and dependent -- money being used to fund the Patient-Centered Outcomes Research Institute.

The Washington, D.C.-based institute was created under the ACA to research which medical procedures are most effective. Since 2012, the institute's board has approved about $1.6 billion to approve 570 studies, including several at the University of Pittsburgh. Last month, the board announced it had approved $42 million for 19 new projects.

Institute spokeswoman Christine Stencel on Wednesday said even short studies can take two to three years to complete but added, "We're expecting a lot more results this year, and even more the year after that."

The fee to fund the institute -- about $2.20 annually for each employee and dependents -- may not put a serious dent in the bottom line. But after more than four years of payments, Mrs. Brooks said, employers still don't know what their return on investment has been or whether it has benefited anyone. The fees take away from other employer programs and, if it's a company such as PNC with more than 50,000 employees, those fees add up.

"We want people to be insured, even if it means employers play a bigger role providing for their communities. But at the same time, it has to be manageable. You don't want to put any company out of business," she said.

So what should an employer do as the legislative battles wage on in Washington, D.C.?

"Anything that's in effect now, we are telling our clients, 'You must continue to do what you're doing and run a compliant operation,'" said Shari Herrle, director of compliance at Downtown insurance agency Henderson Brothers.

Beyond that, "We will continue to provide updates, education and information as it becomes available through our legal resources," she said.

"We are not going to speculate as to what's going to happen first, when it's going to happen and what businesses are going to be permitted to do without having more credible or substantial information."

For some employers, though, waiting for credible information has its own problems.

Mrs. Brooks said while most companies have long locked into their 2017 health coverage offerings, larger employers typically are setting their sights on 2018.

"Employers can't go year to year. They have to plan ahead."

Steve Twedt: stwedt@post-gazette.com or 412-263-1963.

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