Health care workshop focuses on challenges
by Clay Neely
As the federal Affordable Healthcare Act continues to evolve, many employers are still struggling to comprehend the complexities of the law.
A health care reform workshop was held at the Newnan-Coweta Chamber of Commerce Thursday morning, with several key speakers from the insurance industry addressing employers, business owners, CEOs, CFOs, controllers and human resources professionals.
Jason Cogdill, a benefits attorney from North Carolina, broke down the seemingly overwhelming and evolving topic of the ACA. With many employers planning for 2015, Cogdill aimed to present new ideas and solutions.
“There have been a lot of surprises along the way in these four years,” Cogdill said. “Just when we think we know where we’re going, there is a roadblock around every corner. What we can do is try to identify these roadblocks.”
According to a recent Bank of America Merrill Lynch survey, 70 percent of CFOs’ biggest worry is health care costs. For business owners, health care costs have increased 8 to 10 percent annually with little success in attempting to manage costs and trends. “We have no data analytics to coordinate gaps in care and no meaningful strategy or mechanism to control costs,” Cogdill said. “Many industry vendors have no financial motivation to help.”
The employer mandate has been delayed until 2015/2016 along with the nondiscrimination rule for fully insured plans delayed until 2016 or later.
“However, ‘hope’ is not a good strategy and ‘wait and see’ is rarely a successful tactic,” Cogdill said.
With the mandate scheduled to take effect in 2015, employers with 50 or more full-time employees are subject to the law.
The penalty for not offering coverage is determined on a monthly basis and is $176 per month ($2,000 per year) times for all full-time employees.
“For any month that a 30-plus hour eligible employee is not offered minimum essential coverage and the employee receives a premium subsidy from the Marketplace, the employer must pay a penalty based on all full-time eligible employees,” Cogdill said. “This is what is commonly referred to as ‘the sledgehammer.’”
For all employers of more than 100 employees, the effective date remains Jan. 1, 2015, with no exceptions – including all employers without coverage.
Employers with 50 to 99 employees have a delay until at least Jan. 1, 2016, with formal certifications of three items – under 100 full-time employees plus equivalents in 2014, no material reduction in workforce to get under 100 and no termination and there was no substantial reduction in health care coverage from Feb. 10, 2014, to Dec. 31, 2014.
To determine which large employer is applicable, part-time eligible employees must be counted as equivalents.
“The determination period for 2014 is based on any consecutive six-month period in 2014,” Cogdill said. “This is done by calculating the total hours for all eligible employees averaging less than 30 hours, then divide by 120 hours a month.”
The IRS has required that for each hour that an employee is paid or for a period during which no duties were performed due to: vacation, illness, incapacity (disability), jury duty, military duty, or qualifying leave of absence, these hours must be counted.
The IRS standard for a full-time employee is 30 hours a week or 130 a month.
One of the proposed strategies for employers was to implement a more preventative care approach with their employees in order to lower the possibility of medical problems.
Edward Smith, executive vice-president with Hutchinson Traylor Insurance, spoke to solutions and strategies for taming the “Multi-Headed Healthcare Monster.” “The ACA doesn’t do much to address these problems – it seems that it will be up to us,” Smith said.
Problems employers are facing include health care costs rising 8 to 12 percent or more annually.
“We taking it on the chin as employers,” Smith said. “The worst pieces of the (ACA) law are the aspects that are addressed to the special interests groups. You have a pretty messed up law that doesn’t address everything that is wrong with the system.”
As health care costs continue to rise, with few members taking proactive steps to prevent long-term health problems, Smith predicts a less healthy and more frustrated group of plan members.
“The need for care, catastrophic events, lifestyle behavior and inappropriate care patterns are all problems that we face as employers,” Smith said.
“From an employee’s perspective, they don’t have many options. But there also seems to be a lack of accountability in the workforce,” Smith said. “We have employees who aren’t taking care of themselves.”
However, Smith provided a list of strategies for employers including options such as exploring alternative funding arrangements such as partially self-funded insurance programs, a hybrid/level funded insurance program, a telemedicine program and establishing outcome-based, accountability wellness programs informed by employee biometric data.
Smith highlighted the “Population Health Management” program.
“The main question is determining just what’s driving a population’s health care cost. We now have technology that can extract the information,” Smith said. “You can’t control your spending until you know the data that is driving the cost.”
One of the more notable aspects discussed was the use of telemedicine and the benefits that are available to both members and employers.
“Telemedicine is a very practical solution for when a primary doctor isn’t available, for requesting prescriptions or refills, if you’re traveling and in need of medical care or during nights, weekends, and holidays,” Smith said.
The benefits enjoyed by employers include a reduced downtime such as absences and call-outs by employees, along with reducing the high cost of emergency room and urgent care utilization.
“There aren’t many carriers out there so there is a lack of competition and I think the current market features low service, all trying to comply with the ACA,” Smith said. “It’s not a very friendly environment.”