Over One-Third of Employers Say They Don’t Understand Potential Impact of Health Care Reform
According to a recent Nielsen study sponsored by Travelers, 36 percent of employers are not familiar with the potential impact and repercussions of Health Care Reform. Additionally, 25 percent of employers surveyed have not even begun to prepare. The information suggests that employers may not be aware of or understand the potential penalties mandated by the Patient Protection and Affordable Care Act (PPACA) and the potential liability associated with the new benefit requirements. Conversely, the study also indicates that those who are familiar with the regulations are three times more likely to be concerned about potential liabilities, including potential litigation.
Since PPACA first passed in 2010, there have been several modifications to the original legislation. Some of the modifications include postponing or delaying key implementation dates for the requirement of certain employers to offer health insurance to their employees.
Originally, all employers with 50 or more full-time equivalents (FTEs) were required to offer appropriate health insurance to their employees starting January 1, 2014. After several modifications, employers with between 50 and 99 FTEs are now required to offer appropriate coverage by January 1, 2016. For those with 100 or more FTEs, they are required to offer appropriate coverage by two key dates:
- January 1, 2015 to at least 75 percent of their qualified workforce, and
- January 1, 2016 to at least 95 percent of their qualified workforce.
These postponements represent an additional one- to two-year delay for many larger businesses. So with all the delays, both positive and negative press, and notifications from insurers to employers, why is there so much hesitancy for employers to become aware of the regulations? Why not at least identify the potential risks if not prepare for them? According to a recent Rasmussen Reports telephone survey, 62 percent of those surveyed think PPACA will be repealed.
However, Congress has voted or acted more than 50 times to have Reform repealed. To date, even shutting down the government has not proven to fuel the appeal of Reform. Many feel that although the entire law will not be repealed, it will be modified. We have seen several modifications to the legislation and will see more before it is fully implemented. Therefore, considering a strategy of “putting your head in the sand” and hoping it all goes away could be a very expensive decision.
There are some easy questions to ask to determine if you have a higher degree of risk:
- Are your employees easy to recruit and retrain? Health benefits and paid time off are the most important benefits to employees and a critical reason for hiring decisions.
- Do you have a risk compliance program? PPACA regulations and requirements should be a critical part of your risk compliance program with specific risk mitigation strategies identified.
- Do your HR policies and procedures and employee handbook reflect the definitions of full-time, part-time and variable-hour employees since the implementation of Reform? PPACA regulations have created new and refined definitions for each category of employee.
If you answered no to any of the three questions, you may be at risk for penalties and potential litigation with the implementation of Reform.
Discover practical solutions and steps for risk mitigation in parts II and III of this Health Care Reform series. Contact Ron Present, Health Care Industry Group Leader, to discuss your organization's Health Care Reform strategy.