A Gallup poll recently showed that almost half of the population in the U-S gets its insurance through group policies offered by their employers. While most employers would agree that the current system is not perfect, they are united in their discomfort over the uncertainty generated by the change in health care provisions. Rob Louisana, managing partner for Pilot Benefits, a company that helps businesses set up their employee health benefits plans, says employers are asking lots of questions. “Will I be required to offer insurance. What kind of plan do I need to offer? Should I send everybody into the exchange in 2014 or should I continue to offer insurance on my own?” Pam Garner, director of new business development and marketing at Adecco Staffing, says the company’s lawyers are still in Washington trying to learn everything that’s in this reform act. “There were things in the original act that would have excluded our industry altogether because of the cost to us for our temporary contractors,” she says.
Garner attended a seminar last week presented by the Kernersville Chamber of Commerce to learn about changes to the healthcare system. Gayle Anderson, president and CEO of the Winston-Salem Chamber of Commerce, says she’s hearing small and mid-sized businesses express concerns about the future and uncertainty about what’s going to happen with the law. Instead of being proactive in the face of so many unknowns, she says they’re hunkering down and simply focusing on what they need to do today to keep their business going.
Louisana says for those working in the insurance industry, this is a very busy time, largely due to the economy. He says that because employers are pressed to meet their budgets, they are shopping every aspect of their insurance offerings. “If I talk with 20 business owners, 19 of them would say cost is the big issue. So how we get control of cost is the main driving concern and worry and frustration of most of the business owners out there.”
There’s also a lot of anger over healthcare reform– much of it over the law’s mandate that everyone must have insurance. Starting in 2014, large businesses of 50 or more full-time employees will face a financial penalty if they don’t provide qualifying and affordable health care coverage to their workforce. That’s led to lots of speculation – that employers in some sectors may curtail their employees’ hours to part-time status – or lay off employees to attain small business status under the law or simply to cut their benefits costs. Mark Holloway, senior vice president with the Lockton Benefit Group, says small businesses are exempt from mandatory coverage. They have the option of using the state health care exchanges which will go into effect in 2014. But Holloway says the issue that could break the entire plan is if those employers choose to simply stop offering insurance benefits altogether. “You know, one of the concerns is with the exchanges that are available, are employers going to continue to provide health care to their employees? If you run the numbers, 99 times out of 100, it’s in the employers financial interest to jettison its health plan and send their employees to the exchange. If that happens, the penalties those employers pay will not be enough to sustain the subsidies for individual coverage under the exchanges.”
In an effort to avoid that, the law includes financial incentives for small businesses to offer coverage, such as tax breaks and federal grants to help start wellness incentive programs. Ultimately, Louisana says business owners and HR managers have to do their homework to find their way under health care reform. “When it comes to things like the mandate, that people have to purchase insurance, a lot people have taken positions without knowing all the facts. And I think there are a number of things in the plan that are good, some things that are not so good, but the biggest thing is that people need to be knowledgeable so they have an informed position about it. I think there’s too much knee jerk reaction going on right now.”
Agencies like Louisana’s are busy providing such information to their clients and to business groups around the country. In the meantime, some in Congress continue to try to chip away at the law, and next March, the US Supreme Court will review aspects of the Affordable Care law – including the mandate – for its constitutionality. The bottom line for business owners and their employees is that they will not see relief from uncertainty for a long time yet.
