Affordable Care Act bringing sweeping healthcare changes for carriers

By Jeff Crissey on

The Patient Protection and Affordable Care Act – often referred to as “Obamacare” – was signed into law on March 23, 2010. Many businesses held out hopes that the controversial package would be repealed or scaled back, but the 2,500-page law remains on the books and parts of the program have already been implemented.

Tom Goedde, benefits group manager for AHM Financial Group, LLC, says every company should ask the following questions of their attorneys in regards to healthcare changes as part of the Patient Protection and Affordable Care Act:Should we offer coverage?Should we just pay the penalty?

Do we provide minimum value?

Is coverage affordable?

January 1, 2014 marks another important date in the rollout of the new healthcare reform. “2014 is what everybody has been scared about as that is the full implementation date,” said Tom Goedde, benefits group manager for AHM Financial Group, during his presentation to trucking fleet executives at the 2013 CCJ Spring Symposium in Birmingham, Ala. “The big term is going to be ‘shared responsibility’, shared responsibility for individuals and for companies and corporations.”

In a nutshell, individuals must have coverage or pay a penalty, while large companies (defined as 50 or more employees) must offer healthcare coverage to its employees. Small employers are not required to offer coverage, but if they choose to, the costs will certainly be higher than current healthcare plans as they face market reform and higher taxes. “There’s no rest for anyone under the law,” said Goedde.

Citing employer-related research on new healthcare policy, nearly 90 percent are retaining their plan coverage to retain current employees. Of those employers opting to discontinue plan coverage, the biggest reason (86.4 percent) given was the cost of providing that coverage is too high.

“Unfortunately, I think we’re going to find that the Affordable Care Act, as it is called, is not that,” says Goedde. “It is going to add a lot more to business costs.”

Rasmussen Reports issued the results of a telephone survey in May that showed 55 percent of U.S. voters have an unfavorable view of healthcare reform, while a survey by the Kaiser Family Foundation showed that 23 percent of respondents weren’t even aware of the changes to healthcare law, and 12 percent mistakenly thought Congress had repealed it altogether.

Generally speaking, provisions take effect on your healthcare insurance anniversary date, according to Goedde. For example, if a company’s current healthcare plan is renewed on July 1, 2013, the changes in healthcare reform would take place on July 1, 2014.

Goedde, using numbers published by UnitedHealthcare, a division of the largest single health carrier in the country, said individuals, small companies and large companies all will face substantial premium increases. Large companies should expect a 20- to 25-percent increase, small companies a 25- to 50-percent increase, and individuals a whopping 116-percent increase over pre-reform numbers.

The impact of healthcare reform on large companies

Large employers must offer coverage with essential health benefits to all employees, or pay a fine of $2,000 per person after the first 30 employees. “If you have a 100 employees and choose not to offer healthcare, you pay a fine of 70 x $2,000, or $140,000,” said Goedde. “The problem is, if you do pay that fine, you’ll probably have to give out raises or gross up some incomes” so employees can purchase their own coverage.

For large companies that choose to offer healthcare coverage and avoid fines, that coverage has to be deemed “affordable” – no more than 9.5 percent of an individual’s W2 earnings or monthly rate of pay. “The penalty if you offer coverage not deemed affordable is $3,000 per person,” said Goedde.

For more information, go to www.uschamber.com/health-reform/calculator to determine if your company if your company is required to offer employer-mandated coverage as well as if you will have to pay any penalties.

Jeff Crissey

Jeff Crissey is the Editor of Commercial Carrier Journal. In his role, Crissey is responsible for maintaining the excellent print editorial product, improving online audience development and increasing CCJ readers' knowledge of business and safety-related industry issues. Crissey holds a Bachelor's Degree from Auburn University and has been a member of Randall-Reilly Publishing's editorial staff for 14 years, where his coverage of industry topics has earned numerous regional and national awards over the years.

12 comments
Bruce Kolinski
Bruce Kolinski

Our health insurance premiums went up 33% this year from last year.  Apparently "Affordable Care Act" in government-speak translates to "take it in the shorts act" - and we haven't even got to the rationing part yet.  Obamacare seems to be about control of citizens, not health care.

pard
pard

Am I right the Employer of a small business with under 50-employees only has to show that they have inplace a Insurance Carrier that will make Health insurance available. The Employer has no out-of-pocket expense

BarbRRB
BarbRRB

I am the employer and employee of a small family business. My policy costs me $ 1,224.00 and this is with a 5,000.00 deductible "per person". Last year the same policy was $977.00. Affordable Care Act???  What a joke!!  

guest
guest

Dear employee,   the govt forces us to purchase health insurance or be fined.    To do this and keep your jobs available,   be informed your new deductible amount will be $10k individually,   $20k per family annually.   

Getting Hammered
Getting Hammered

Employers want to take care of their employees, but this is a situation where the government is forcing small employers to jump off a REAL fiscal cliff.  And they are doing so in such a short period of time without a lot of thought.  Most people have no clue how complicated and expensive this is going to be.  Trucking companies, especially with over 50 employees, are going to get hammered by the costs of Obamacare.  Just trying to figure out who is a "full time employee" is a nightmare where drivers hours and pay fluctuate or there are part time drivers.  And at this point, there is virtually no information, so companies are trying to plan in a dark hole with little information.  Nice job, voters.

concerned
concerned

Looking at your renewal if self employed it's amazing what isn't covered. Such things as chemo-therapy, any tests over $600, Mammograms, PSA tests, and more. Like going out of business indicates all of this is in the disclaimer sections. I knew I smelled a rat when last year or so the AMA and American Cancer Society out of the blue started making statements like maybe Americans test too early and often for Cancer. Amazing how they were so in bed with the Obama and Pelossi people...Actually its very disturbing they would risk lives in return for government money. 

going out of business
going out of business

I got my renewal in the mail. On the bottom of each of the pages is a disclaimer.."this premium includes state and federal taxes and fees, including the Insurer Fee (about 2.3% of premium) and the Reinsurance Fee under the Affordable Care Act." In the body of the letter it states that "there are federally mandated Taxes & Fees that have been included in this renewal exhibit. Those include the Patient-Centered Outcomes Research Institute, Federally Mandated Insurance Fee, Transitional Reinsurance Fee." My renewal went up 15% and I never used it once last yr. Now all I'm doing is paying fees...yet I can't get my refund from the IRS because they have no money...Nice

kcame1
kcame1

THIS IS TAX, A BIG TAX AND THE IRS IS IN THE DRIVE SEAT

Sick and Tired
Sick and Tired

Scandal of century coming up.  Batten down the hatches 'cause it's going to get really ugly!  A hearty thanks to all of you nitwits who voted this president in.

Sick and Tired
Sick and Tired

 @kcame1

 And, considering the unfolding sewer of a scandal associated with the IRS, isn't that encouraging? 

Gayle
Gayle

And exactly how did YOUR congressmen and Senators vote?

Sick and Tired
Sick and Tired

That is irrelevant.  This president seems proud to have his name on it.  He's the culprit behind it, and he owns it.  HE signed it into law, and the malfunctioning Supreme Court allowed it to go forward.  Nothing happened at all with this legislation without this president's signature.  He is guilty as charged!