HALLOWELL – Health care reform is now the law of the land and many are scrambling to understand the implications. Events are popping up to provide opportunities for people to learn about the law’s impact.
As a health insurance broker and consultant, I have personally been accommodating many requests to provide education to chambers of commerce and other business groups throughout Maine. I have a few observations worth sharing.
On May 12 I had the honor of participating in a health care reform presentation at the Human Resources Convention at the Samoset in Rockport.
I listened to another speaker outlining different provisions of the law to a group of more than 100 HR professionals. The employer responsibilities were covered in a single Power Point slide with a comment that few Maine employers should be affected by potential penalties.
On May 20, the Ledgislature’s Joint Select Committee on Health Care Reform Opportunities and Implementation held its first meeting.
Having sat through all five hours of the hearing, I was again struck by the fact that discussion about the impact to employers was covered in a single Power Point slide with no mention of the potential for negative impacts on Maine businesses.
There is not a business in Maine, large or small, that will not be directly and significantly impacted by this law. Here are a few examples:
The employer responsibilities for companies employing more 50 people are significant. Since part-time equivalents are counted in the equation, it is notable that employers that do not fall into this category by calculating benefit-eligible full-time employees still may find themselves impacted by these rules.
Assuming a company in this category does not offer health insurance to employees, it can expect to pay a $2,000 per-employee fine (excluding the first 30 employees) if just one employee purchases coverage through the new federal exchange and qualifies for a subsidy.
Since subsidies extend to individuals earning up to 400 percent of the federal poverty limit, this is likely. If a company does offer coverage in this category, it could face similar fines if the coverage doesn’t meet new government standards for both coverage and affordability.
Affordability is defined by the percentage of income an employee must pay for his portion of the insurance premium. This calculation involves information an employer does not have access to, which will result in many employers unable to avoid penalties.
Employers of all sizes must make “free choice vouchers” available, which translates to allowing employees to take the cash equivalent of the employer’s contribution toward health insurance premiums to buy subsidized individual coverage.
The administration of this is one issue. The potential impact to small companies trying to maintain their group health insurance plans is another.
New reporting requirements for employers are also very significant, ranging from reporting the value of company health insurance plans on W-2s, to reports to DHHS regarding quality measures of the insurance plan, to new IRS reporting requirements.
There are also new reporting requirements to the vendors providing different insurance plans and administrative functions for employers that capture the information needed to determine if a plan is considered a “Cadillac” plan subject to an additional 40 percent excise tax.
I have the impression that many of the people who will be instrumental in implementing the health reform law in Maine are not recognizing or are dismissive of the challenges employers are facing. If this does not concern you, it should.
Details matter, and the details that Maine has latitude on in regards to implementation are critically important.
The structure of the exchange, where many individuals and small companies will purchase health insurance, could not be more important.
Most of us access health insurance through our employers. If employers are not an integral part of the discussion, how are they likely to fare in the end?
In the hearing on May 20 I heard many generalities. I heard about intentions. I heard about hopefulness that certain provisions would work out in the end.
I wanted to hear details. I wanted to hear thoughtful debate about specific provisions to ensure negative impacts are avoided or minimized. I wanted to hear discussion about how to support Maine employers as new rules and regulations are developed.
If you are not concerned about these details, you need to be. Don’t lose sight of this process. What happens from here on out may ultimately be more important than what happened to get us here.
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