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The Bottom Line for Health Care Coverage





Employers are faced with major decisions about the health care benefits, impacting their employees and families. Mark Patrick, Partner at Moloney + O’Neill Benefits, LLC provided the nuts and bolts to businesses at Greater Spokane Incorporated’s BizStreet program “Calculating Health Care Costs.”

So, what do you need to know as an employer when you sit down with your provider to discuss options now and in the future? Here’s what we learned to help you make the best choice:

What Employer Qualifies under the Affordable Care Act?

Starting January 1, 2014 employers with 50 or more full-time (FT) employees (including employees on Medicare) are mandated to provide coverage that pays at least 60 percent of benefits covered by the plan and for which each employee’s contribution is less than 9.8 percent of household income. Full-time is defined as working an average of 30 or more hours per week. The penalty is $750 annually for every FT employee, and for employers with unaffordable coverage or not meeting minimum standards, $3,000 annually per FT employee.

Some businesses are testing in four markets to increase part-time workers to reduce costs.

Employer Costs Steer Decisions

When you do the math, costs play a major role in determining what option is best (both from the employer and individual out-of-pocket expense). Patrick shared a case study to show the hard costs for the employer:

Net Employer Expense without health care reform (HCR): $2.7 million

Option #1: Net Employer Expense with HCR: $4.6 million

Option #2: Net Employer Cost to Terminate Employee Benefits & Pay Penalty: $5 million

Option #3: Reduce coverage and maintain minimum offering: $1.2 million

Therefore, option #3 allows this employer to continue coverage, but there will be a reduction of benefits to the employees. In some cases, the employer plan option will actually hurt an employee.

Employers do NOT have to provide health care coverage for part-time workers

As Mark Patrick warned, businesses need to be aware that major shifts will be scrutinized by the Department of Labor. Be cautious in this area and don’t get caught in a class action lawsuit.

Excise “Cadillac” Tax

Non-tax bearing entities like 501c3s won’t have to worry about the excise tax, but others will. While it won’t hit until 2018, businesses need to prepare a long-term strategy. What you choose now could cost you big down the road.

No Joke – Employers Need to Monitor Employee Hours

Beginning Oct. 15 (that was Monday), employers must monitor their employees’ hours. Enough said.

Saying “No” to Employer Plan

If an employee decides to “opt out” of their employee coverage that meets federal requirements, the employee, not the employer, will pay a penalty.

Wellness Programs on the Rise

Yes, you might see wellness programs popping up.

Why?

According to Patrick, starting in 2014, the HIPAA wellness program incentive will increase from 20 percent to 30 percent of total cost of coverage. But before you jump on the bandwagon as an employer, make sure it has genuine ROI, and that it is accessible and doesn’t discriminate.

Think strategically before you determine your future health benefit plans and stay tuned. We will continue to provide programs to keep you up to speed. Our next event is the 2013 Future of Health Care forum, sponsored by Group Health and Washington Dental Service on Feb. 14, 2013.

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