U.S. Cham­ber talks health care ef­fect on busi­ness

The Covington News - - FRONT PAGE - GABRIEL KHOULI gkhouli@cov­news.com

As busi­ness own­ers try to get a han­dle on how fed­eral health­care re­form is go­ing to af­fect their op­er­a­tions, they’re find­ing a few an­swers and a lot of ques­tions.

The Cov­ing­ton-New­ton County Cham­ber of Com­merce hosted a Tues­day we­bi­nar on the Af­ford­able Care Act for small busi­nesses led by Katie Ma­honey, ex­ec­u­tive di­rec­tor of health pol­icy at the U.S. cham­ber, who ad­dressed what she saw as the three main is­sues af­fect­ing busi­ness: the em­ployer man­date, the ex­pan­sion of Med­i­caid and health­care in­surance ex­changes.

Law still un­clear

“We still do not know what’s in it… There are very vague, gen­eral pro­vi­sions that are through­out the law with re­gard to really ev­ery el­e­ment that the law touches on,” said Ma­honey, who said new reg­u­la­tions are coming out all the time that pro­vide clar­ity — and more con­fu­sion in some cases — about how the law will be car­ried out.

The U.S. cham­ber has com­mented on 47 reg­u­la­tions to date, and seven new reg­u­la­tions were re­leased in the last two weeks, Ma­honey said, and any­one want­ing to know the even­tual ef­fects of the law needs to con­tinue to track th­ese reg­u­la­tions.

Lo­cal in­surance agent

Gary Massey, who at­tended the we­bi­nar, echoed those thoughts af­ter­ward, not­ing that he fol­lows notes from sev­eral sources, in­clud­ing the IRS and ma­jor in­surance com­pa­nies. While im­ple­men­ta­tion of some as­pects of the law have been de­layed, Massey said peo­ple need to re­al­ize there are firm dead­lines in place for as­pects of the law and be ready to com­ply with those.

Ma­honey said the pur­pose of the health­care law was to ad­dress the crit­i­cal flaws in the U.S. health­care sys­tem, par­tic­u­larly when it came to the small group health in­surance mar­ket (where many small busi­nesses buy in­surance) and the in­di­vid­ual health in­surance mar­ket, in­clud­ing dou­ble digit pre­mium in­creases per year, ex­clud­ing cus­tomers based on pre­ex­ist­ing con­di­tions and pric­ing is­sues.

She said one theme of the health­care re­form law is the idea of shared re­spon­si­bil­ity which plays out by ask­ing busi­nesses, health in­sur­ers, med­i­cal de­vice com­pa­nies and phar­ma­ceu­ti­cal com­pa­nies to pay ex­tra to im­prove cov­er­age for those not re­ceiv­ing ad­e­quate cov­er­age now.

Em­ployer man­date

The em­ployer man­date has been one of the most widely-dis­cussed as­pects of the law and it forces com­pa­nies who have 50 or more full-time equiv­a­lent (which in­cludes part-time hours in its cal­cu­la­tion) to of­fer health­care in­surance to its full-time em­ploy­ees through the com­pany or po­ten­tially pay ex­tra in taxes.

A full-time equiv­a­lent em­ployee is equal to 120 hours of work, so for ev­ery 120 hours of part-time work, a busi­ness is con­sid­ered to have an ad­di­tional full-time em­ployee. (Even though part-time hours count to­ward de­ter­min­ing whether a com­pany has to pro­vide cov­er­age un­der the law, part-time em­ploy­ees don’t have to be of­fered in­surance.)

Un­der the law, Ma­honey said com­pa­nies are re­quired to pro­vide af­ford­able cov­er­age to all em­ploy­ees and de­pen­dents; af­ford­able cov­er­age has been de­fined as in­surance pre­mium costs that don’t ex­ceed 9.5 per­cent of an in­di­vid­ual em­ployee’s house­hold in­come if that in­come falls within 100-400 per­cent of the fed­eral poverty level.

Ma­honey said the clear is­sue with that cal­cu­la­tion is that busi­ness nei­ther know nor want to know the to­tal house­hold in­come of their em­ploy­ees. The government rec­og­nized that flaw, Ma­honey said, and told busi­nesses they would be safe if they made sure in­surance pre­mi­ums did not ex­ceed 9.5 per­cent of an em­ployee’s W-2 stated in­come. While that’s very clear, Ma­honey said the W-2 in­come could be much less than house­hold in­come, which means busi­nesses would have to pay more to­ward em­ployee’s pre­mi­ums to make sure they’re low enough.

The U.S. cham­ber has also raised ques­tions about how to treat em­ploy­ees who may ac­crue part-time hours some months and full-time hours the next month. Nei­ther com­pa­nies nor em­ploy­ees want in­surance cov­er­age on a ro­tat­ing monthly ba­sis, Ma­honey said.

The government has given com­pa­nies the flex­i­bil­ity to mea­sure em­ploy­ees’ work­loads across any time frame from three to 12 months. If dur­ing that time, the em­ployee has worked an av­er­age of more than 30 hours per week, then he will be con­sid­ered a full-time em­ployee. He must then be of­fered in­surance for at least six months.

How­ever, some out­stand­ing ques­tions are whether busi­nesses have to de­clare the pe­riod of time they’re mea­sur­ing an em­ployee’s work­load. Em­ploy­ees the­o­ret­i­cally could mea­sure an em­ployee for three months, and if that em­ployee would be con­sid­ered full time, the com­pany could then ex­tend its mea­sure­ment pe­riod longer.

An­other ques­tion is whether the in­surance pre­mium pay­ment for de­pen­dents has to also meet that 9.5 per­cent af­ford­able stan­dard.

In ad­di­tion, there are ques­tions about sea­sonal em­ploy­ees, who over a 12-month mea­sure­ment pe­riod could very eas­ily fall un­der part- time sta­tus.

One is­sue not raised by Ma­honey, but raised by some at­ten­dees was what the health­care law would do to tem­po­rary staffing firms. If th­ese firms are re­quired to of­fer in­surance to all the tem­po­rary em­ploy­ees they pro­vide to out­side com­pa­nies that would have sig­nif­i­cant costs both in the ac­tual in­surance and in track­ing em­ploy­ees in such a high-turnover busi­ness. Med­i­caid ex­pan­sion

The Af­ford­able Care Act was de­signed to see a large ex­pan­sion of peo­ple el­i­gi­ble for Med­i­caid across the U.S.

Ma­honey said the law is de­signed to ex­pand Med­i­caid cov­er­age to ev­ery Amer­i­can un­der the age of 65 who has an in­come of 133 per­cent of less of the fed­eral poverty level. Pre­vi­ously, states could set the per­cent­age of fed­eral poverty level they were go­ing to of­fer Med­i­caid too.

How­ever, in its June 28, 2012 rul­ing, the U.S. Supreme Court said in­di­vid­ual states do not have to par­tic­i­pate in the fed­eral government’s Med­i­caid ex­pan­sion.

The U.S. Dept. of Health and Hu­man Ser­vices said this week that states can­not par­tially par­tic­i­pate in the fed­eral ex­pan­sion of Med­i­caid. States ei­ther have to ac­cept the full ex­pan­sion or opt out com­pletely.

Ge­or­gia Repub­li­can Gov. Nathan Deal has al­ready said he will not ex­pand Med­i­caid in his state.

The po­ten­tial ef­fect on busi­nesses is that they will now have to cover a larger por­tion of em­ploy­ees who oth­er­wise would have been cov­ered un­der the ex­panded Med­i­caid.

Un­der the health­care law, busi­nesses are not re­quired to of­fer “af­ford­able” in­surance to peo­ple who would be cov­ered by Med­i­caid, but with­out a Med­i­caid ex­pan­sion busi­ness will likely have to cover more peo­ple.

Ma­honey em­pha­sized sev­eral times that many ques­tions re­main to be an­swered and that the full ef­fect of the health­care re­form act won’t be de­ter­mined for years to come.

For Ma­honey’s take on health in­surance ex­changes will af­fect busi­ness, go to Cov­News.com.

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