Congress Considers Revisions to ACA to Help Small Businesses

Attempts to repeal a tax on insurance companies in the new healthcare reform law are picking up steam in Congress, driven by worries that the fee would affect small businesses especially hard.

The legislation would get rid of the fee on health insurance companies set to go into effect when the law does in January 2014. Referred to as the health insurance tax (HIT tax), the fee will be calculated based on the plans insurers sell right to individuals and companies, known as the fully insured market, but doesn’t include plans established and managed by companies themselves, known as the self-insured market.

The majority of big companies self-insure their workers; as a result, experts forewarn that insurance companies will pass the added costs of collecting the fee to small businesses, which are inclined to buy coverage in the fully insured market.

“It’s pretty straightforward, what’s going to happen, that the tax is going to be passed along,” Rep. Jim Matheson (D-Utah) said in an interview, observing that insurance agents and underwriters have told him as much. “It isn’t really taxing the insurance companies, it’s taxing the people paying the premiums, and in this case, that’s small business owners.”

Matheson is one of several democrats who have pledged their support to the legislation repealing the HIT tax, uniting with almost every Republican in the House. Recently, the bill, H.R. 763, hit the 218-cosponsor mark, which is enough to guarantee its passage in the lower chamber; the tally has since increased to 221.

Sam Graves (R-Mo.) attributed the bill’s momentum to trepidations expressed by small business owners, including many who have testified during hearings before the House Small Business Committee, over which he officiates.

“We keep hearing that from small businesses; that they’re premiums keep going up, keep going up, and now this thing’s coming along, and they’re going to go up even more,” said Graves. “That’s the reason you’re hearing so much about this tax and why you’re seeing such bipartisan efforts to repeal it.”

Those efforts, however, are fighting against the political current on the Hill, where lawmakers have been reluctant to consider proposals to modify the health care law.

This hasn’t discouraged small business advocates from pursuing small fixes, and their efforts are starting to yield signs of progress. Recently, Sens. Susan Collins (R-Maine) and Joe Donnelly (D-Ind.) introduced legislation that would change the health care law’s definition of full-time employee from 30-hour workers to 40-hour workers, a shift meant to keep labor laws more steady for businesses.

Prepare for Affordable Care Act: Tips for Employers

With the Affordable Care Act (ACA) set to go into effect in January 2014, many employers supporting group health care plans are rushing to get ready for the impending changes. Here are some tips on how to prepare for the upcoming implementation of the ACA:

1. Figure out how the ACA will affect your business. According to Forbes, when the ACA is ratified, it will oblige businesses with over 50 full time workers to offer affordable healthcare to them. The ACA is demanding employer coverage just for those who work over 30 hours per week for a period of a month. Corporations who wish to avoid providing this medical insurance for their workers and who are on the verge of having 50 employees may then look to temps and staffing agencies in order to evade being forced to obey the law or create more part-time jobs as another way to shirk the ACA’s policies. Companies doing this will undermine the legislation and its intentions of increasing coverage to more American employees.

2. Choose whether to “pay” or “play” and make decisions about your insurance. To “pay” is to pay employer-shared-responsibility penalties of around $2,000 per employee per year. To “play” is to offer employer-sponsored coverage to fulltime employees.

3. Think about adding wellness program incentives. According to a recent survey by the Midwest Business Group on Health, more than 80% of the country’s biggest employers are looking to implement a penalty and reward system to encourage their workers to get healthy.

4. Organize and give out obligatory employee communications like a summary of benefits and coverage, plan descriptions, etc.

5. Amend your Health Insurance Portability and Accountability Act privacy and security rules and processes before the Sept. 23, 2013, deadline for acquiescence with final regulations.

6. Pay the first comparative effectiveness research fees by July 31, 2013, and plan for future reinsurance charges.

Health Care Reform Will Lead to Stricter Workplace Wellness Programs and Harsher Penalties

The Obama administration recently announced the final rules on employee wellness programs under the Affordable Care Act (ACA). The U.S. Department of Health and Human Services issued the regulations, which were enacted under the ACA on May 29. The program allows employers to increase the incentives they give workers to get them into a wellness program or other means of promoting healthier choices and behavior. It supports workplace health encouragement and deterrence as a way to decrease chronic sickness, better health, and regulate growth of health care costs while making sure workers are safe from unfair underwriting methods that could lessen benefits based on health status.

Employers also get clarity on applying penalties for unhealthy employees. Under the new regulations, employers have greater flexibility to charge higher premiums to workers who do not meet certain health goals.

According to a recent survey by the Midwest Business Group on Health, more than 80% of the country’s biggest employers are looking to implement a penalty and reward system to encourage their workers to get healthy.

The rules support “participatory wellness programs,” which are typically accessible no matter the individual’s health status. Included are programs that compensate employees for the cost of membership to a gym or fitness center, rewards for those who attend a free monthly health education meeting or who undergo a health risk assessment.

The final rules protect users by demanding that health-contingent wellness programs be logically planned, equally available to all similarly situated people, and that they accommodate suggestions made at any time by an individual’s doctor founded on medical appropriateness.

Due partially to the ACA, 82% of almost 100 global and national businesses are lowering premiums and offering gift cards for healthy living or charging higher co-payments and fees for poor health choices like smoking. The final rules will go into effect starting on or after Jan. 1, 2014

Read the official news release from the U.S. Department of Health & Human Services here: http://www.hhs.gov/news/press/2013pres/05/20130529a.html

Small Businesses Unsure How Affordable Care Act Impacts Them

According to eHealth’s Fall 2012 Small Employer Benefits Survey, small businesses are confused when it comes to the impact of health care reform. In her article Health Care Reform: Myths and Realities, author Maria Valdez Haubrich lays out the facts for small business owners unsure about where they stand when it comes to providing insurance to employees.

  • Employers with 50 or fewer full-time employees are not required to buy health insurance for them.
  • Employers with 50 or fewer full-time employees don’t face any tax penalties for not providing health insurance.
  • Those with 51-199 face $2,000 for every employee that gets insurance through an exchange, except for the first 20 who do so.
  • Health insurance exchanges are to be created in every state by 2014, which will allow employees to buy subsidized insurance even with a pre-existing condition.

So what does this mean for small businesses? It means that for the smallest firms, health care reform really won’t have an impact at all on their bottom line. Medium-sized companies, however, will be subject to the mandate and might face higher costs of doing business, which could lead to them looking for sources of financing and cash flow such as factoring.

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