Healthcare Reform: The Impact on HR and Every Business
As I write this article I realize that many business owners are furious about the recently signed Healthcare Reform Act. However, in speaking with many of said business owners, I find there is a lack of knowledge as to exactly what it entails for them specifically. One major concern of mine is that many companies in the threshold of 2-50 employees do not have full time HR personnel. This could also be true for those employers of 51-99. Reform has definitely secured the role of Human Resource professionals in our country. Unfortunately, it has also increased the work load for them and the risk of companies who do not employ them.
First things first, let’s get our head out of the sand. If you assume that 2014 is the hard deadline to educate yourself on these new measures and regulations, you will end up behind the curve, and possibly subject to additional penalties and taxes from the government. On September 23, 2010 certain portions of the reform take effect, others do so just 3 1/2 months later on January 1, 2011. With that being said, in the next nine months HR professionals need to be prepared for the following:
- Available tax credits for certain size employers to assist in premium cost
- Prohibitions on lifetime and annual benefit spending limits
- Requirements for your plan to cover, at no charge, most preventive care
- Allow dependents to stay on parents’ policies through age 26
- No longer will FSA, H.S.A., HRA or Archer MSA be allowed to cover Over the Counter Medicines.
- Small employers will be allowed to adopt new "Simple Cafeteria Plans"
- Employers must enroll employees in the new Federal long-term care insurance (CLASS Act) unless the employee opts out.
- It will be even more important to educate employees with H.S.A. and MSA the penalty for spending those dollars on non-qualified medical expenses, as the penalty jumps to 20 percent.
- Employers will be required to report the value of health benefits on W-2’s.
- A new tax of $2 per enrollee on all private health insurance policies will be effective.
Those are just a few of the upcoming reforms that will impact employers directly. There will be several others, including but not limited to: cuts in certain Medicare programs, annual taxes on health care related industries and even additional taxes on indoor UV tanning. You need to know how your company will be affected starting now (especially if you are a tanning salon).
I would suggest taking the following steps. First, determine what bracket you fall into. Are you an employer of 2-50 employees, 51-199 or 200+? These are the breakouts of what your company may be subject to under the new law. Take advantage of numerous sources of information. I assume you may already be doing this if you are reading this article. I applaud you on your efforts. Organizations like Human Resources IQ are invaluable to you as a professional, especially if they are staying in front of the issues. In addition, I suggest using the Kaiser Family Foundation as a source.
The next step I recommend could be the toughest thing to do. Take a hard look at your Health Insurance agent/broker relationship. Do you consider them a vendor or a trusted advisor? Here is a good litmus test for this: Do you call them before or after you make a decision? A trusted advisor is someone you can lean on because of their professionalism and ability to assist you when in need. The days of simply mailing your renewal to you or pushing you close to and sometimes past the deadline are coming to an end. The agents/brokers who will not only survive but thrive under Health Reform are those that can do the best job of educating you and even provide solutions to help your business handle the new burdens being imposed. Hopefully, your current relationship is already assisting you with several HR compliance issues and will continue to do so.
Another great step to take is to begin shifting your workforce’s culture to that of Wellness. There will be many initiatives in reform to encourage a Health and Wellness program at your company. If for no other reason, do it to help control your healthcare costs into the future. Studies have shown that businesses who have implemented a wellness program in the past are doing a better job of controlling claims and have higher productivity. A big plus is that some smaller employers may qualify for tax incentives to put a Wellness program in place.
As you move forward into seeking education on reform, also pay close attention to how the Health Insurance Exchanges may impact your business in the future. Know what limits will be placed on the types of plans you can offer. And definitely be sure of what reporting and regulation requirements you will be subject to. Education and knowledge have been important for HR professionals to be effective in their roles for many years. Starting today, it is imperative.