Healthcare reform is coming! You might hear it referred to as the Patient Protection and Affordable Care Act (PPACA), or a host of other names. Regardless, it will be here before you know it. If you employ more than 50 full-time equivalent workers (FTEs), there are a few simple steps you can take to help you navigate healthcare reform:
- Establish an accurate way to keep track of all employees’ hours in 2013.
- Determine whether it is better to “pay or play.” In other words, it is more lucrative for you to pay a penalty under the employer mandate or to offer a benefit plan that meets the minimum requirements for affordability and coverage?
- Attend a conference or two. Many conferences are being held to help business owners understand the impacts of healthcare reform.
- Surround yourself with trusted advisors, from your benefits firm to your accounting firm and your attorney. And please get your staff involved in these conversations.
As you already know, there is enough new regulation here to confuse even the most experienced benefit advisors, so speak with everyone you can and learn as much as you can. These steps will get started in the right direction.
While we are on the topic, there is a provision on the PPACA that will impact your bottom line in 2014:
- In 2014, every employer – regardless of self-insurance – that has a healthcare benefit program will pay a “transitional reinsurance” fee. This fee will be assessed over every life that is insured on your policy and will be assessed at $6.00 per head, per month. That number decreases to $3.00 in 2015 and $1.00 in 2016.Consider an employer with 500 employees on a benefit program. The average household size is employee plus two, which totals 1,500 lives at $6.00 each per month. That amounts to $9,000 per month, or $108,000 in 2014. The proceeds of the “transitional reinsurance” go to commercial insurers to stabilize premiums in the individual market.
Again, reach out to your trusted advisors and seek their input. You will not regret it.
