Do your homework when exploring options created by health care reform [View all]

[WorseBeforeBetter]

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Pay or play? If you are a “large” employer with 50 or more full-time equivalent employees (FTEs), the penalty calculation is complex. Failure to offer baseline coverage with one employee getting a taxpayer subsidy means a $2,000 non-deductible “tax” per each full-time employee after the first 30. The penalty for offering an unaffordable plan, or sub-minimum coverage, is $3,000 per actual full-time subsidy recipient.

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There are some creative options for large and small businesses. Regulators turned a bulky law into many more pages of fine print, making medical providers and insurance carriers very nervous. Market confusion is forcing new options from carriers, so watch for plan designs unheard of two years ago. For example, we will now see plans which allow small employers to offer multiple options such as a bronze level, 60 percent type of plan, a silver and gold. Others give a price break for using micro-networks. Very small employers without coverage may find new ways to craft a sub-bronze plan, giving employees meaningful support without breaking the bank.

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Know the risks you are taking when exploring alternatives. Employers can be creative by emphasizing part-time work, resulting in no mandated coverage for those who work less than 30 hours per week. They can also subsidize the employee cost so the plan is barely affordable, meaning no federal subsidy in the exchange. In addition, employers can turn to contractors, staffing agencies and multiple corporate shells to try and skirt mandates. The former means you had better have your recordkeeping in order and adhere strictly to the rules, while the latter are warning signs. Unscrupulous strategies to avoid mandates are in the regulators’ crosshairs.

For employees, the new law is not about free care; it simply improves guaranteed access to individual and dependent coverage. Few experts predict slower increases in total premiums or employee contributions. Our health care system remains procedurally broken and inefficient. Young people will bear more of the cost, and new plan designs will accelerate cost-shifting to all employees. Now is the time to ask good questions and demand more of your personal and professional advisors. Decision day is coming soon.

Bruce Clarke, J.D., is president and CEO of CAI Inc., a human resource management firm with locations in Raleigh and Greensboro. The company helps organizations maximize employee engagement while minimizing employer liability. For more information, visit www.capital.org.

http://www.newsobserver.com/2013/06/01/2932888/do-your-homework-when-exploring.html##storylink=cpy