Your 2015 Obamacare Planner
Complying is complicated. Feel less overwhelmed with these tips and insights.
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The deadlines for coming into compliance with Obamacare are rapidly approaching—they'll hit companies with more than 100 full-time employees this coming January and firms with between 50 and 99 full-timers in January 2016. Regardless of where your company falls, you're likely feeling a bit overwhelmed. According to a survey of companies with 50 to 999 employees released in October by Automatic Data Processing of Roseland, N.J., more than 75 percent of executives lack confidence in their understanding of the Affordable Care Act. One out of three midsized businesses have already faced fines for not following its requirements, and most have vastly underestimated the time and money it will take to be fully compliant.
As you start preparing for the rollout of Obamacare, there are a few key steps you should be taking now, experts suggest. The first is to prepare for tough new reporting requirements. Starting in 2016, companies will need to begin reporting details to the IRS about the plans they're offering and the employees who are eligible to sign up for them. One of the biggest challenges will be keeping track of who's signing up and educating employees about the potential ramifications if they don't join your health plan, says Don McAnelly, director of Rehmann Healthcare Management Advisors in Saginaw, Mich.
Related: What will it cost if you don't comply?
For example, if you employ a lot of workers making $30,000 or less, and your plan costs employees 9.5 percent of their wages, which is the maximum allowed under the law, some may balk—and make choices that cause problems come reporting time. "If they have to put 9.5 percent towards their health insurance, that's almost three grand, which is a lot of money," McAnelly says. If workers go to the federal or state exchanges instead to get a better deal, and they take tax credits for doing so, they could get in hot water with the IRS. "If the employer reports that they offered them coverage, the employee is going to get a notice saying they shouldn't have gotten those premium tax credits."
The bottom line, says McAnelly: "Educate your employees, make sure they understand, or there could be a lot of trouble."
If you're looking to save money on your ACA-compliant health coverage, you may be tempted to sign up for a "limited network" plan, also called a "skinny network" plan. Some insurance carriers are offering these plans, which essentially strip down the provider networks to the point where patients end up with very little choice in doctors and hospitals. Some plans don't even offer coverage for hospitalization. Paul Foery, manager of insurance services for Houston-based human resources provider Insperity, suggests not jumping into one of these plans without first using the Actuarial Value Calculator released by the Center for Medicare & Medicaid (CMS), which will allow you to confirm that your coverage will meet the minimum requirements of the ACA.
Related: What the Patient Protection and Affordable Care Act Means for Entrepreneurs
Even if the calculator shows the plan to be kosher, Foery warns that some of these limited-option plans may eventually end up in the government's crosshairs. "Companies are looking at those plans and saying it might be an option because they're much less costly, and the calculator may say the plan is actuarially sound even when it doesn't offer hospitalization," Foery says. "But some believe the government is going to fix that loophole. It just adds to the confusion."
Regardless of how big or small your company is, or whether you have to adopt Obamacare in 2015 or 2016, one easy way to start decreasing your healthcare costs now is to implement wellness programs, suggests Anthony Cellucci, managing partner at The Beacon Group of Companies, an insurance and benefits consultancy in King of Prussia, Pa. That's because in many cases, your insurance carrier will determine your rates largely based on your "loss ratio"—the ratio of claims it pays to the premiums it earns. "Insurers love to see loss ratios below 90 percent, ideally below 80 percent," Cellucci says. "Wellness programs really can be a proactive way to decrease premiums."
And wellness programs don't necessarily have to cost your company a lot to implement, especially since carriers and brokers will often subsidize them for you. The Beacon Group recently sent nurses out to one of its clients to do voluntary blood pressure screenings for its employees, for example. "They found seven people that had high blood pressure that needed to be controlled with medication. Those seven people had no idea," Cellucci says. "We headed off something that could have been much worse. We subsidized 100 percent of the cost of that, but it turned out to be a rather small investment considering the results."