All business owners, regardless of the size of their companies, should pay attention to the Patient Protection & Affordable Care Act (PPACA), President Obama's health care reform law, even though the constitutionality of portions of the law are being disputed in federal courts.
That was the message Larry Anderson, CEO of Tri-City Medical Center, drove home as he discussed the controversial law during a meeting of the Carlsbad Chamber of Commerce's Board of Directors on Aug. 17.
"I think it's very important that all employers pay attention and follow the upcoming progress of health care reform," Anderson said. "It has the potential to have an impact on their business."
Implementation of the law's employer mandates is ongoing and remains a "moving target" given how much of the law might change, Anderson added. While it will not be immediately obvious, the law will change the way health care is delivered, even if courts or a Republican congress overturns or repeals some of PPACA's provisions
"One of the most prominent features of the PPACA is its complexity and sheer volume," Anderson said. "As a result, interpretive regulations to implement the law will be required for years to come. Keeping abreast of this evolving guidance and sharing the emerging implications with key stakeholders, including boards of directors and senior management, is critical."
One of the most important things employers can do is to prepare themselves for the institution of Open Enrollment in 2013, what Anderson described as the "big bang … from a communication standpoint."
"This event will likely require significant effort to educate and engage employees," Anderson said. "As with any major change initiative, people need to be involved in order to build acceptance and adjust behaviors. Proactive organizations will begin now to enlist support from leaders, solicit input from employees and build the communication infrastructure required to support this major change."
Anderson suggested that business owners and companies know the numbers, regulations and time lines of the law and also be proactive when it comes to the wellness programs that they offer employees.
Under the law, large employers, defined as those who employ an average of at least 50 full-time employees (those who work 30 hours or more a week) on business days during the preceding year, will be required to offer qualifying health coverage or pay a $2,000 penalty per full-time employee, excepting the first 30.
Smaller employers will be exempted from this "play or pay" mandate.
Employers must also pay a penalty of $3,000 for each full-time employee with income that's below 400 percent of the federal poverty level, which in March 2010 was $88,200 for a family of four, who opt for exchange coverage in lieu of employer-based coverage. They must also offer "free choice" vouchers to some lower income employees if the cost of the employer-provided health care plan is between 8 and 9.8 percent of their wages.
Some elements of the law have already gone into effect, and additional parts of the act will take effect in the coming years. The year 2013 will see limits on flex spending accounts, a reduction in the itemized medical deduction of federal income taxes; and increases in the Hospital Insurance portion of the Federal Insurance Contributions Act.
In 2014, hospitals start receiving reduced payments for their disproportionate share of uncompensated care (under the Disproportionate Share Hospital (DSH) program) and in 2018, high-cost health care plans, often called "Cadillac plans," will be taxed at 40 percent above $10,200 for an individual (or $27,500 for a family), higher for those in high-risk professions, such as law enforcement, EMTs, construction workers and miners.
Ted Owen, president and CEO of the Carlsbad Chamber of Commerce, said businesses should pay heed to Anderson's message and start taking steps to prepare their businesses for the law's implementation.
"This law has the potential to impact many businesses in a very significant way," Owen said.
To obtain a copy of Anderson's presentation, contact Jeff Segall, Tri-City's vice president of business development & marketing at [email protected].
That was the message Larry Anderson, CEO of Tri-City Medical Center, drove home as he discussed the controversial law during a meeting of the Carlsbad Chamber of Commerce's Board of Directors on Aug. 17.
"I think it's very important that all employers pay attention and follow the upcoming progress of health care reform," Anderson said. "It has the potential to have an impact on their business."
Implementation of the law's employer mandates is ongoing and remains a "moving target" given how much of the law might change, Anderson added. While it will not be immediately obvious, the law will change the way health care is delivered, even if courts or a Republican congress overturns or repeals some of PPACA's provisions
"One of the most prominent features of the PPACA is its complexity and sheer volume," Anderson said. "As a result, interpretive regulations to implement the law will be required for years to come. Keeping abreast of this evolving guidance and sharing the emerging implications with key stakeholders, including boards of directors and senior management, is critical."
One of the most important things employers can do is to prepare themselves for the institution of Open Enrollment in 2013, what Anderson described as the "big bang … from a communication standpoint."
"This event will likely require significant effort to educate and engage employees," Anderson said. "As with any major change initiative, people need to be involved in order to build acceptance and adjust behaviors. Proactive organizations will begin now to enlist support from leaders, solicit input from employees and build the communication infrastructure required to support this major change."
Anderson suggested that business owners and companies know the numbers, regulations and time lines of the law and also be proactive when it comes to the wellness programs that they offer employees.
Under the law, large employers, defined as those who employ an average of at least 50 full-time employees (those who work 30 hours or more a week) on business days during the preceding year, will be required to offer qualifying health coverage or pay a $2,000 penalty per full-time employee, excepting the first 30.
Smaller employers will be exempted from this "play or pay" mandate.
Employers must also pay a penalty of $3,000 for each full-time employee with income that's below 400 percent of the federal poverty level, which in March 2010 was $88,200 for a family of four, who opt for exchange coverage in lieu of employer-based coverage. They must also offer "free choice" vouchers to some lower income employees if the cost of the employer-provided health care plan is between 8 and 9.8 percent of their wages.
Some elements of the law have already gone into effect, and additional parts of the act will take effect in the coming years. The year 2013 will see limits on flex spending accounts, a reduction in the itemized medical deduction of federal income taxes; and increases in the Hospital Insurance portion of the Federal Insurance Contributions Act.
In 2014, hospitals start receiving reduced payments for their disproportionate share of uncompensated care (under the Disproportionate Share Hospital (DSH) program) and in 2018, high-cost health care plans, often called "Cadillac plans," will be taxed at 40 percent above $10,200 for an individual (or $27,500 for a family), higher for those in high-risk professions, such as law enforcement, EMTs, construction workers and miners.
Ted Owen, president and CEO of the Carlsbad Chamber of Commerce, said businesses should pay heed to Anderson's message and start taking steps to prepare their businesses for the law's implementation.
"This law has the potential to impact many businesses in a very significant way," Owen said.
To obtain a copy of Anderson's presentation, contact Jeff Segall, Tri-City's vice president of business development & marketing at [email protected].