If you are still struggling to understand the Affordable Care Act, relax. You have some extra time to figure out how to comply with it, thanks to the one-year reprieve the White House announced on July 2. But that doesn’t mean you should wait until next summer to start planning for the changes coming under the ACA, otherwise known as Obamacare.
If your company has 50 or more full-time employees, you will have to provide health insurance starting in 2015 or face fines. While changes to the act are still likely, experts recommend that you start mapping out a strategy for the next 12 months today, so by this time next year, you’ll be ready to roll out a benefits plan that’s both affordable for your company and desirable to the employees you’re trying to attract and retain.
Here are some steps you can take in each of the coming seasons to prepare.
Renew now. If you already offer health insurance, consider renewing early for 2014, suggests Anthony Lopez, manager of the small-business group at Mountain View, Calif-based eHealthInsurance. By doing so, you may avoid premium increases caused by some of the provisions in the law.
For example, the ACA stipulates that starting next year, insurance carriers will only be able to set premiums based on a three-to-one age ratio, meaning there can only be a three-fold difference between your young, healthy workers and your older workers.
"If you renew early, you can keep your age bands from the previous year," Lopez says. Check with your insurance broker or carrier for the early-renewal deadline and an estimate of how much you might save by renewing early.
Survey staff. If you will be offering coverage for the first time in 2015, or you’re planning a major benefits overhaul, now is a great time to survey your employees about how they get their health coverage today. Where do they buy their coverage? How much do they pay out-of-pocket each year for healthcare? Knowing the answers to questions such as those will help you design the optimal plan for your company.
"Let’s say half or more of your people get coverage through their spouse. It’s not likely you’re going to be able to compete with what they have access to today," says Tracy Watts, U.S. health-reform leader for Mercer, a unit of New York-based insurance broker Marsh & McLennan. "You might want to offer the bare-minimum plan so it can be affordable for your employees and for you."
Research your state’s exchange. The state health insurance exchanges, which are now called "marketplaces," will roll out in January. That’s the time to start sussing them out as you strategize for 2015. If you employ 100 or fewer people, you may be able to buy an affordable small-business plan on your state’s exchange. And depending on the size and makeup of your workforce, it may actually make more sense for you to send all your employees to buy individual plans on the exchanges, rather than offering an in-house plan. But before you do anything, scrutinize your state exchange to make sure it’s operating smoothly and all the kinks are being worked out in a timely manner.
Consider part-timers. Winter is also a good time to determine whether you should shift to a largely part-time workforce to dodge the ACA all together, or at least to hold down the costs covering your employees, suggests Brian Miller, chief operating officer of the small-business consultancies AdviCoach and The Entrepreneur Source in Southbury, Conn. "The reality is that small businesses may want to hire more part-time workers," Miller says. "But you need to do some workforce planning and make decisions about what kind of job-sharing you can do without sacrificing the quality of the employees you hire or the customer care you provide."
Don’t forget private exchanges. By the time the flowers start blooming next year, you should have a pretty good idea about how you’d like to structure your benefits plan in 2015. Your broker can shop around for the best health plan, but you can also do some research yourself. For example, you may want to explore the many private health exchanges that are now offering small-business plans, such as those run by Towers Watson, Mercer, Aon Hewitt, and eHealthinsurance. Lopez suggests doing a “dry run,” by having your broker model several choices for you or using one of the many available online tools that allow you to input some basic information about your employees and then view a sampling of available plans.
Educate your staff. With your benefits plan firmly in place for 2015, next summer is when you need to start thinking about the best way to educate your employees about the impending changes. Take the time to put together a clearly written educational package, so you can distribute it before open enrollment starts in October. After all, health reform is confusing, and it’s your job to answer your employees’ questions and allay their concerns. An overview of how to orient your staff can be found here.
By next summer, your employees will have been barraged with ads from insurance companies eager to sell them individual plans. It’s up to you to help them sort out their options. "We’re going to be hit with a huge media blitz—TV ads, radio spots" from insurers and others who stand to benefit from health reform, Watts says. "Getting out in front of that is a really good idea."