Lynchburg Business

Health Care Reform: What Does it Really Mean for Business Owners?

Issue: June 2010 by Carrie Williams in Human Resources

Health is defined as “the condition of being sound in body, mind and spirit.” It is arguably the most significant and essential facet of our lives. Because of this, we are constantly seeking ways to become savvier in terms of the different ways we maintain our health. With that said, little is more important than the type of health care we get from our employers. So how does the recent Health Care Reform, passed by the government, affect how we are able to maintain our peace of “body, mind and spirit?”

First things first: Who will be affected by the changes in health care and when do these changes take place? It seems that almost everyone is going to be effected by the changes. From seniors and children to large families and individuals, most Americans will feel a varying sense of change once the reform gets rolling. According to Brandon Webb, Risk Architect for Mid-State Insurance, “the impact will be minimal over the next few years.”

Some changes will take place this year, while others will be implemented by the year 2020. However, for business owners, 2014 is the magic number. This is the year that small businesses will have separate Exchanges provided to them, making different health care coverage plans for individuals a little easier to choose from.

Everyone likes having a good array of simple choices at their disposal. It’s the same with insurance. The more options, the better. So, for many small business owners, the state-based Small Business Health Options Program (SHOP) Exchange, an offshoot of the reform, is going to be just the ticket to bring peace of mind to employees and business owners alike.

“The Exchanges will operate as not-for-profit organizations and will compete against health insurance companies,” Webb explained. “The exchanges will allow small groups and individuals to comparison shop for ‘standardized’ health plans (i.e. Gold, Silver, Bronze, etc.).”

Comparing and purchasing differing coverage can be a hassle, but the Exchange takes the guesswork out by reducing typical clerical aggravation and standardizing the options.

The bottom line, of course, is how much this is going to cost.

“If speaking in general terms, small businesses will be affected more favorably than larger businesses because they may be eligible for tax credits for offering a plan and won’t be penalized for not offering a plan like larger businesses,” Webb said.

Businesses with fewer than 50 employees may be eligible for this credit, which will cover a percentage of premiums for employee coverage until the new insurance Exchanges are put into place sometime between 2014 and 2017.

While the pros and cons of the new healthcare reform have been vigorously debated, for the general public, the benefits of the reform do include extending coverage to 30 million previously uninsured Americans. It also means doing away with co-pays for things like checkups and any other preventative care beginning in 2018. In addition, the government will be cracking down on the fight against health insurance fraud, enhancing past methods to protect consumers better than ever before.

Now, if you’re thinking this is too good to be true, there are, of course, a handful of negatives. For example, taxes will be increased on certain procedures affecting the body, like indoor tanning services, beginning this summer on July 1. Also, the large-scale financial consequences of a bill this size are difficult to predict. The reform is estimated to cost around $938 billion over the next decade and affects millions. However, at this point, it’s simply not possible to accurately analyze the long-term effects.

Another important thing to keep in mind is the possibility that companies could incur penalties for not providing health care coverage.

“The employer mandate requires employers with 50 or more employees who do not offer coverage to their employees to pay $2,000 annually for each full-time employee over the first 30, as long as one of their employees receives a tax credit,” Webb explained.

These federal fines for not providing health care coverage will also take effect in 2014.

If you are wondering why you’re having such a difficult time understanding all of the ins and outs of the bill, don’t beat yourself up too much. Even experts who have been immersed in the 2,600-page legislation and amendments for the past year aren’t completely sure of the fine points and implications.

“At this point, all we have is a general guideline to the changes,” Webb said. “The Secretary of Health and Human Services, in addition to several other agency heads, is already working on ‘interpreting’ the law.”

With that in mind, Webb’s advice to business owners is to stay on top of the changes as they come.

“I would encourage business owners to stay educated and informed on the matter. I have already taught several four-hour workshops on the bill and will continue to teach ‘update’ workshops the closer we get to some of the various deadlines. The workshops we teach are free to the HR and business owner community,” Webb said.

With much of the reform set to officially take place in several years, business owners still have time to research and prepare for the changes to come. Educate yourself with government resources and be sure to keep your employees in the loop as well. Many of the key points of the bill are meant to make your life and the lives of your employees a little easier. So take this time to understand all the ways that you can make the reform work for you, your staff and your business.