At Symposium, Employers Told to Budget Now for Health Care Reform

Employers should assess their business quickly to determine a plan of action that minimizes risk as they face looming health care reforms that are already taking place, according to speakers at Wednesday’s Arkansas Business Health Care Symposium.

Speakers and panelists from insurance companies, accounting firms, law firms and state government urged an audience of about 300 business and nonprofit managers to immediately determine what the Patient Protection & Affordable Care Act requires of them and begin taking steps to comply.

They also gave an overview of the law’s myriad reporting requirements and tax implications, and encouraged businesses to make the most of the one-year delay in the employer mandate, which requires that employers with 50 or more employee provide health care for its workers or pay a penalty.

"Find the path that you're on," Joe Thompson, Arkansas' surgeon general and the director of the state’s Center for Health Improvement, told the crowd during a luncheon panel. "And minimize the risks that you have for your business."

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Other speakers at the half-day symposium -- Arkansas Business’ third covering issues related to the ACA -- were Tom Hayes of Regions Insurance Inc., Cal Kellogg of Arkansas Blue Cross & Blue Shield, Chris Doolittle of BKD LLP and Juliana Reno of Kutak Rock LLP.

The luncheon panel, which Thompson moderated, featured Andy Allison of the state Department of Human Services, Cynthia Crone of the state Insurance Department and Ray Hanley of the Arkansas Foundation for Medical Care.

Those panelists, who are leading agencies that deal directly with setting up health care reform in Arkansas, were optimistic that the state Legislature’s "private option" plan to insure 250,000 Arkansans will create an attractive marketplace for insurance carriers, resulting in a stable health care system and lower premiums for employees.

But a host of unknowns remain, including just what those insurance rates will be. Crone said the insurance department will be able to share more about what those premiums will look like in the first week of September.

More: To see all speaker presentations from the event, click here. Tweets from the event are available at #HealthCareAR.

Making the Plan

Meanwhile, businesses should continue to make a plan for complying with health care reform. And while the task might be daunting, Wednesday’s speakers insisted that businesses start now to determine how the law will affect them and plan accordingly.

For employers who might be big enough to have to provide health insurance for employees, that process includes running the numbers on the fees and fines that can come with reform.

"The devil’s in the details with this law," Doolittle said during his presentation on accounting and budgeting for reform. "I think making broad assumptions is dangerous."

For example, Doolittle said he is "nervous" about employers who use independent contractors, and noted that the Internal Revenue Service is quickly hiring auditors who specialize in them. 

He said certain businesses, when calculating total number of employees, must pay close attention to the number of contractors they use in case the government counts them as full-time workers.

Doolittle said it’s also important for employers who haven’t traditionally provided insurance -- those with high employee turnover and low compensation, such as restaurants, hotels and retailers -- to budget now for insurance coverage and related expenses.

Businesses also must be prepared for the law’s new reporting requirements, mainly to the IRS, which will help the government determine who gets tax credits or subsidies and whether a business that is offering health coverage is offering qualified plans. 

Speakers also encouraged employers to regard 2014 as a "bonus year" for preparing for the employer mandate. In July, the Obama administration delayed the mandate to 2015 to give employers more time to comply with health reform regulations.

In their respective remarks, Reno and Crone said the delay gives employers time to get their reporting systems in place and make projections about whether they will offer health coverage and if so, how.

The more employers can accomplish in 2014, the more prepared they will be when the plan comes fully online the following year, they said.

Despite all the hard work businesses should do now, there’s a host of new rules, regulations and phases of reform that will offer new challenges in 2015 and beyond. Kellogg outlined some of those in his presentation, including likely changes to essential benefits packages, which could mean standardized packages across all 50 states.

At the same time, symposium speakers advised businesses to not focus too much on the numbers game when deciding between providing insurance or not providing insurance and paying the penalty. 

Providing workers with quality, affordable health care coverage can be a competitive advantage when working to attract or retain high-quality employees, they said.

"It is not just about taxes, it is not just about money," Reno said. "It is a strategic decision."

Wednesday’s symposium was sponsored by Arkansas Blue Cross & Blue Shield, BKD LLP, CGI, Kutak Rock LLP, Regions Insurance Inc. and St. Vincent Health System.