How Will Health Care Reform Affect Me and My Business?

Two businessmen discussing the impact of health care reform on their businesses.

For both small and large employers, the number one factor affecting your business will be Health Care Reform compliance. All businesses will have stricter regulations and reporting surrounding human resource administration. The Department of Labor and Health and Human Services are conducting random audits that are costing employers thousands of dollars in penalties because they do not have all the necessary compliance documents, employee notifications or are not HIPAA compliant.

The employer mandate for small businesses has been rescheduled for 2015. Businesses with fewer than 50 employees may shop in the State Exchange in October 2013 or continue with “business as usual.” They are not required to provide health coverage to employees.

Large employers (over 50 employees (or Full Time Equivalent – FTE)) will be required to offer affordable insurance (premium not to exceed 9.5% of employee wages) to 95% of employees working over 30 hours per week. If a business has multiple locations, add together the total number of employees at all locations. For example, a business employing 100 people working 24 hours per week would multiply the number of hours times the number of employees (100 x 24) and divide by 30 hours (minimum hours needed to be included in the mandate) = 80 Full Time Equivalents. This employer would be required to offer coverage. This calculation protects employees so that employers will not just reduce the number of hours per employee to avoid the mandate.

Employers with 250 or more employees will be required to report the “value” of employer-sponsored group health coverage on W-2′s for the 2012 calendar year. And finally, businesses are required to provide their employees with a uniform explanation of coverage. This is simply a summary and explanation of benefits and coverage provided under a group health plan.

The bottom line – The health benefit consultants at Primary Care Insurance Solutions can walk you through all the requirements to comply with the new law. We now have enough information to assist in strategizing for the year ahead in terms of what constitutes “a basic level of coverage”, what the penalties will be for not offering coverage and helping to identify if it is best to Pay or Play in regards to the employer mandate.

 

Frequently Asked Questions

What is the primary concern for both small and large employers in regards to their business?

The primary concern for both small and large employers will be Health Care Reform compliance. This involves stricter regulations and reporting surrounding human resource administration, having all the necessary compliance documents, employee notifications, and being HIPAA compliant.

Are small businesses required to provide health coverage to their employees?

No, businesses with fewer than 50 employees are not required to provide health coverage to their employees. They may shop in the State Exchange or continue with “business as usual.”

How is the affordability of insurance calculated for large employers?

Large employers, with over 50 employees or Full Time Equivalents (FTE), are required to offer affordable insurance, where the premium does not exceed 9.5% of employee wages, to 95% of employees working over 30 hours per week. The calculation involves adding together the total number of employees at all locations and then calculating the FTEs.

Are businesses required to provide a summary of coverage to their employees?

Yes, businesses are required to provide their employees with a uniform explanation of coverage, which is simply a summary and explanation of benefits and coverage provided under a group health plan.

What assistance can Primary Care Insurance Solutions provide to businesses?

The health benefit consultants at Primary Care Insurance Solutions can help businesses understand all the requirements needed to comply with the new law, strategize for the year ahead in terms of what constitutes “a basic level of coverage”, determine the penalties for not offering coverage, and help identify if it is best to Pay or Play in regards to the employer mandate.

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