Is Health Care Reform Really HR Re-Form?

Dear HR Specialist:

 

On March 23, President Obama signed the controversial Patient Protection and Affordable Care Act into law.  But while this marked the end of a hard-fought battle in Washington, for employers the battle has just begun.

Many provisions in the new law won’t kick in until as late as 2014 - but some take effect this year (see below).  And this sweeping new law will change the way you handle your benefit plans - FOREVER.

Most of those immediate changes affect health insurers and the coverage they must offer. But if your organization provides health insurance benefits, you need to understand this short-term timetable.  In short, health care reform means you need to reform your HR operations, too.

 

 

 

INDIVIDUAL MANDATE. The entire health care reform law rests on the idea that when more people have health insurance—young, healthy people in addition to older, sicker people—risk will be spread out and costs will come down.

The law requires all individuals to have health insurance coverage by 2014. Those who choose not to have insurance would pay a $95 penalty in the first year. But the price tag will rise to $750 or 2% of income (whichever is higher) in 2016.

The law is expected to bring insurance to more than 32 million Americans who currently aren’t covered. Within a decade, health reform advocates say, about 95% of Americans will have health insurance, up from the current 83%.

EFFECTS ON EMPLOYERS. Technically speaking, the law doesn’t require employers to provide health insurance benefits. However, it does establish strong incentives to do so.

“Large employers”—those with 50 or more employees—that don’t offer insurance will have to pay an annual tax of $2,000 per full-time worker. The first 30 uncovered workers would not count toward the tax penalty. Small employers (those with fewer than 50 employees) will be exempt from the tax. Businesses with more than 200 employees must automatically enroll workers into their health insurance plans. Employees would then be able to opt out. These provisions go into effect in 2014.

Small-business tax credits of up to 35% will take effect this year to help organizations with 25 or fewer employees pay for affordable employer-provided insurance. The IRS will publish these new rules.

 

 

 

Qualified small businesses will be able to purchase insurance for employees through state-based exchanges known as Small Business Health Options Programs (SHOPs). They will be designed to allow small employers to pool risk together, ideally lowering coverage costs. SHOPs must be in place by 2014.

Note: If you’re a small business and even one of your employees opts out of employer-provided coverage in favor of insurance available through the state-based exchanges, you could be required to provide a voucher worth the value of the per-employee premiums you pay under your plan. This generally applies to lower-income workers who would pay more than 8% of their income for employer-provided coverage.

The law also caps employee contributions to health-related flexible spending accounts (FSAs) at $2,500 per year in 2011 and beyond. Employees will no longer be able to use FSA funds to pay for over-the-counter medications. Tip: Ask your FSA provider about plans to implement this change. Employees will want to know details before they commit to FSA contributions next year.

 

LAST CHANCE for Early-Bird Savings

 

LEAP 2010 – the 6^th annual Labor & Employment Law Advanced Practices Symposium – has just added a session on implications of health care reform for employers of ALL sizes.  We’ll also be addressing the topic in our Thursday Washington Watch session, and during our Friday Breakfast Roundtables.

 

LEAP 2010 takes place April 21-23 at San Diego’s breathtaking Hotel del Coronado.  The conference features more than 40 of America’s top employment attorneys and HR authorities, and our Breakfast Roundtables and Learn from the Lawyers Luncheon give you more contact with our experts than ever before.

 

Sign up for LEAP today!  As a LEAP Letter reader, you’ll save $100.00 off

the tuition others must pay.  And when you take advantage of our Early Bird

Discount, we’ll knock another $100.00 off – IF you register by noon Friday (see below).  You also get your choice of three FREE pre-conference sessions … comprehensive course materials … and six FREE months of our HR PECIALIST: EMPLOYMENT LAW newsletter PLUS our PREMIUM PLUS online service.

 

NOTE: Because of the additional confusion over heath care reform, we have extended our Early Bird Discount Deadline.  You MUST register by noon Pacific Time on Friday, April 2^nd – or this $100.00 savings will be lost forever.

 

Barack Obama was swept into office promising change – and when it comes to HR and benefits, he’s certainly delivering.  LEAP 2010 will show you how to deal with your current challenges … and prepare for the next ones.

 

I look forward to seeing you in beautiful San Diego.

 

Sincerely,

 

(sig.)

 

Phillip A. Ash, Publisher

The HR Specialist

 

P.S.  We’ve arranged a very special room rate at the Hotel del Coronado, and we’re at 90% of our capacity – so reserve yours TODAY.  Go to www.HotelDel.com or call toll-free 800-468-3533, and use Group Code “LEAP 2010” for your discounted rate.

 

P.P.S.  Your satisfaction is unconditionally guaranteed.  If LEAP 2010 fails to meet your needs, we will refund 100% of your tuition – no hassles, no questions asked.  Your course materials and your two FREE bonuses (a combined $523.50 value) are yours to keep.  It’s that simple.