Businesses Prepare for Employee Benefit Changes with Obamacare

Glass companies will not only be required to provide insurance for full-time employees with the advent of the Patient Protection and Affordable Care Act (PPACA) in 2014, but that coverage will have to meet a specific standard as will be required by law.

And that’s just what worries John Dwyer, the president of Syracuse Glass Company Inc.

“The only impact we’re facing right now is the continued cost escalation,” he said. “Our broker told us in June to expect an 18 percent increase on [insurance policy] renewal. Subsequently, they brought in a 14 percent increase.”

During Wednesday’s hour-long webinar designed to increase employer awareness about the coming changes to employee benefit programs, Rick Ramsay, the vice president of commercial policy and government affairs for the UnitedHealth Group, detailed pending employee requirements for the companies of at least 50 full-time employees that will be required to provide coverage to both employees and their children aged 26 or younger. Employers will not be required to provide coverage for employee spouses.

Businesses that don’t comply will be penalized $2,000 per employee.

But employers will also be responsible for providing “affordable” insurance, according to the new statute’s stipulations. That means the total cost of the insurance is not to exceed 9.5 percent of the employee’s household income. That figure will be determined by the employee’s W-2 tax form. Medicare and Medicaid both meet the affordability requirements.

“It can’t just be any coverage,” Ramsay said. “It has to meet ‘minimum essential coverage.’”

Businesses that fail in providing “affordable” health care will be docked $3,000 per employee, although it will be another year of added time to come into adherence with the new law before any penalties are doled out.

Another notable change from the new law will be apparent in the ratings system previously employed by insurance companies. Gone are the days where they could adversely size up a potential client based on gender, health background or claims history.

A new, limited ratings system only allows for clients to be judged on the geographic area in which they live, age (the rates of older clients can be no more than three times that of their younger and usually healthier counterparts) and tobacco usage.

Ramsay asserted that new challenges and financial uncertainties await because of the health insurance taxes needed to sustain ACA.

He estimated that the new law could cost as many as 250,000 jobs by 2021, while raising premiums for both individuals and families, increasing costs for seniors and adding more debt to both the federal government and individual states.

Ramsay said 15 states – but especially ones such as Texas, California, New York and Florida that are laden with small businesses – will shoulder roughly 70 percent of that burden.

Dwyer sounded resigned to what lay ahead for his family-owned company.

“I was hoping to be spared a big increase this year because in New York, our health insurance plans are already loaded with mandated coverages,” he said.

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