How Will Health Reform Affect Employers?

David Levine, CEO of the American Sustainable Business Council: Measures taking effect in 2014 will create more competition among insurance companies, which will drive down prices. When the ACA is fully implemented, small businesses will no longer pay more than large corporations for their insurance. However, one element in the Court’s opinion could hurt small businesses. The Court said that states need not expand Medicaid to 133% of the federal poverty level, as required under the ACA. Small businesses would benefit from the expansion since it would reduce the number of employees needing to be covered by a company’s healthcare plan. AHIP: Employers will have more incentive to self-insure their health coverage — increasingly shifting the burden of the fees to smaller employers and individuals who must shoulder the cost of a statutorily fixed level of fees no matter the relative size of fully insured coverage markets. Edward Fensholt, JD, and Mark Holloway, JD — leaders of Lockton’s Compliance Services group: Employers will need to begin making significant decisions in the next several months. Regulations will be very complex, particularly on the employer mandate. We can expect a crush of complex guidance compressed into a very short time. The next stops on the health reform train include distribution of four-page plan summaries, W-2 reporting of health plan values, limits on health flexible spending accounts, new income, and capital gains taxes on executives. The Supreme Court opinion also adds a wrinkle to the expansion of Medicaid eligibility. The Court said the feds cannot hold a state’s Medicaid funding hostage if the state doesn’t play. That could mean that more people will seek subsidized coverage in an insurance exchange or-worse-that some won’t qualify for Medicaid or exchange-based subsidies. Julio Portalatin, president and CEO of Mercer: Any employer that has not conducted a health care reform check-up should make it their first order of business. Employers need to redouble their compliance efforts, especially for immediate requirements, such as providing summaries of benefits and coverage to employees. This court’s decision reinforces popular features, such as providing coverage of dependents up to 26 and eliminating exclusions for preexisting conditions. David Rahill, President of Mercer’s Health and Benefits business:Employers can expect a spike in plan enrollment for 2014 as a result of the individual mandate. But they may see enrollment level off once the state exchanges become operational. By 2014, health insurance exchanges will be operating in every state, offering community-rated insurance to certain small employers and individuals, with federal premium tax credits available to help some people buy that coverage. In the near term, employers must report the value of employer coverage on IRS Form W-2, cap dollar limits on health care flexible spending arrangements, and increase Medicare withholding for high earners (those earning more than $200,000 per year). They must also comply with the reforms already in effect, such as coverage of dependents up to age 26.