Chamber Panel Quells Some Fear Over Health-Care Law
BOARDMAN, Ohio – Even the presenters at a panel discussion Wednesday on the Patient Protection and Affordable Care Act acknowledged they are continually learning more about the law and its provisions.
“We’re learning more and more each day, and each week since the election [the U.S. Department of Health and Human Services] has been sending out a lot more details,” said John Cooper, regional vice president of sales for Anthem Blue Cross and Blue Shield, Northern Ohio. In addition to providing more details about the law, which was passed in 2010, HHS is asking for feedback.
Cooper joined Jim Rosa, a principal in the tax department of Hill, Barth & King’s Boardman office, and George Millich, an attorney with Harrington, Hoppe & Mitchell, Youngstown, in a panel discussion titled “Health Care Reform: Are You Ready?” presented by the Youngstown/Warren Regional Chamber and Anthem.
“Each week we continue to get a little bit more information. We have a lot more information than we did three or four months ago, and then each week we continue to get more,” Cooper said. The law iwill continue to evolve as the federal government continues to write the rules and because the law remains a “political hot potato,” he remarked.
One of the law’s objectives is to increase the number of people who have health insurance. As of 2010, 296 million Americans are covered by health insurance, a number expected to grow by at least 10 million in 2015. While people will continue to receive health insurance primarily through their employers, more individuals are going to be purchasing coverage through health insurance exchanges, the panelists said.
Enrollment begins Oct. 1 for the insurance exchange in Ohio, through which individuals will be able to purchase coverage effective Jan. 1, 2014, Cooper said. Those individuals also will be able to potentially receive some level of subsidy from the federal government if they earn less than 400% of the federal poverty level. “The exchange for Ohio right now is going to be mainly run by the federal government but we’re also assuming that the state will be in some type of partnership with them,” he said.
Benefit design changes will begin impacting small businesses in 2014, as well as penalties for large employers that don’t provide minimum coverage, and the individual mandate, he said.
Under the act, a large employer is defined as one that averages 50 or more full-time employees, Millich said. Any employer that falls under that classification is required to offer health-care coverage to both the employee and any dependents under the age of 26, though not the employee’s spouse. Full-time employees are employees who are ‘reasonably expected to work at least 30 hours per week” or 130 hours per month, Millich said.
Options for an employer include offering health insurance, offering coverage that does not meet the minimum requirements and paying a penalty, or not offering coverage and allowing employees to purchase coverage on the individual market. Those employers who decide not to provide coverage, however, face the challenge of attracting and retaining employees.
Large employers face a penalty equivalent to $2,000 times the number of full-time employees, minus the first 30, Millich said.
“The law is constantly changing,” he remarked.
“There’s so much here and the government has to release many more regulations [and] guidance related to this,” Rosa affirmed.
“From a tax standpoint there’s a lot of new taxes,” Rose explained. Among them is an increase in the Medicare tax that applies to individuals earning more than $200,000 annually or joint filers earning more than $250,000, as well as a new Medicare tax on investment income depending of the level of income a person has. There are also penalty taxes for those that don’t cover themselves, he continued.
“Even individuals are faced with paying a tax. Businesses are faced with certain additional taxes if they don’t provide coverage or they require the employee to pay more than a certain percentage, so there’s just a lot of things to think about,” he added.
“None of this is straightforward,” he remarked. “It’s just really unfortunate how complicated it is.”
Fear about the new law starts with uncertainty, Rosa said. “The other fear is just the cost,” he added. “There’s a lot of uncertainty related to that. If an employer doesn’t provide coverage at all, there is certainty to what those costs are. But going forward, one of the big questions is going to be, ‘Do I just get out of the game altogether? Do I agree to just pay the penalty because maybe that’ll be something less than what the ultimate cost would be to provide coverage?’ I think that’s one of the big fears businesses have.”
A lot of employers “are just going to do the math” and determine whether they want to provide coverage, Rosa said.
From a coverage standpoint, the good news for anl employer with fewer than 50 employees is the law isn’t going to affect them, he said
The morning panel cleared the air “a little bit” for Ryan Silvashy, resource development director for Falcon Foundry Co., Lowellville. “There are still a lot of questions to be answered,” he said. Among those questions are what the costs are going to be, different aspects of the plan, and determining how many full time employees his company will have, he explained.
“We have a lot of part-time employees right now and the 30-hour rule is a big question mark for us,” he continued. “So those are some of the takeaways, some of the challenges that I can think of.”
The panel offered “a little bit of clarification” to Douglas Darnall, CEO of PsyCare Inc., Liberty Township, though it didn’t lower his anxiety level, he remarked. The government still needs to publish all of the rules and regulations, he said.
“It’s very, very scary in terms of the added costs for a company,” he said. “We offer health insurance to all employees but we have a good number who refuse because they cannot afford their percentage of it. So there’s still a lot of uncertainty.”
“What I hope people walk away with [today] from an overall standpoint is an understanding of how this affects them as business people, how it affects them as individual, and then really just what the tax considerations are that they need to think about,” Rosa said.
Copyright 2013 The Busness Journal, Youngstown, Ohio.