New realities for businesses and health care
On September 19 the Chamber is hosting a workshop for businesses on the new health care law, courtesy of Chamber member Hoskin, Farina and Kampf. While there is a lot of trepidation on the part of businesses these days over what the future may hold, this is the one law that is generating the most widespread concern and questions. And, with that concern comes the very real possibility of major shifts in how individuals get their health insurance in the future.
In a recent poll conducted by the Chamber 60% of our members currently offer health insurance but one in four of them is considering dropping coverage. Frustration over a lack of transparency in how costs are assessed for small employers along with a common perception that it may be much less of headache to simply pay a fine then try to comply with all the new rules are a couple of the factors leading employers to this conclusion.
Not waiting for the upcoming Chamber seminar I recently attended a briefing at Community Hospital on the topic. Presenter Rick D. Wagner, an accountant with Chamber member Eide Bailly, LLP presented 43 slides to about as many business people in the room. The common reaction to most of those slides were moans, groans and a few gasps as the reality of implementing such massive changes hit us smack between the eyes.
I won’t even begin to discuss the individual mandate but here are some realities for small businesses:
- The small employer tax credit which sounded like such a great idea to incentivize employers to continue offering health insurance is a nightmare to calculate. In order to qualify you need to have less than 25 full time equivalent employees being paid no more than an average of $50,000 or less. You must be offering a “qualified plan”. Your credit is 35% of either the premiums paid by you OR a benchmark premium…confused yet? It is so difficult that most small businesses are finding it costs more to pay your accountant to figure out whether you qualify than you may actually see coming back as a credit.
- What are the penalties for NOT offering the insurance after 2013? Depends on whether you are a large employer (50 or more employees). But what exactly qualifies as an employee? Got seasonal workers…they will be part of the equation. And the plan itself must be “affordable” for the employee AND their dependents. If not…there is a penalty for that! So, yes, it may be $2,000…but it could be $3,000 per employee per year if your plan is not affordable…confused yet? I am.
- And, there are new rules, transitional rules and interim rules being written everyday that employers will have to comply with in the very new future such as showing the value of employer sponsored health insurance on all W-2s after December of this year.
The few simple bullet points above (believe me…there are plenty more points where those came from) indicate why many employers may be considering dropping coverage and sending employees to the health care exchange, once it becomes operational to get individual coverage. Yet, missing in all of this discussion is the opportunities to truly focus on health care rather than health insurance.
Obesity and poor lifestyle habits drive up costs for individuals, employers or whoever is paying the bill (including taxpayers). But we shy away from the personal responsibility issue in all of these discussions. The simple reality is that if employers of all stripes could help manage utilization costs by incentivizing employees to get regular screenings, eat right and exercise rather than paying for costs associated with heavily utilized insurance plans or penalties we would all be better off.
Larger employers in our community are already starting to implement such measures, particularly those who are self insured. That is why you read of workplace clinics in our local papers. But 80% of the Grand Junction Chamber membership is small businesses employing less than 10 people. These businesses are just as motivated as large employers to have a healthy workforce that is less prone to major illness and time lost at work. Yet it is impossible for them to band together at this point to offer services jointly such as a clinic or shared wellness coach and see a change in their overall insurance costs…or future penalties.
If, as was promised when the health care law was passed, we truly want employees to continue to be able to get insurance through their employers then we must find a way for small businesses in Mesa County and elsewhere in this country to band together and focus on “health” for their employees. Many of us want to do that…but somehow our government gets in the way.