Business Enhancement Associates Aha! Moments: Health care reform: What do business owners need to know?

Monday, August 13, 2012

Health care reform: What do business owners need to know?

by Catherine Carlock
Special Reports/Publications Writer

Date: Friday, August 10, 2012, 2:55pm EDT - Last Modified: Friday, August 10, 2012, 3:05pm EDT

Katie Arcieri/The Business Journal

The panelists who spoke at The Business Journal's health care reform discussion, from left to right: Allyson Labban, an attorney with Smith Moore Leatherwood’s health care practice group; Dr. Grace Terrell, president and CEO of Cornerstone Health Care; and Todd Yates, managing partner of employee benefits services firm Hill, Chesson & Woody.

The Supreme Court’s decision to uphold the Affordable Care Act has left many employers with a lot of questions about health care reform.

Maximum Out-of-Pocket Premium Payments Under PPACA (Photo credit: Wikipedia)

The legislation itself provides a framework but gives little guidance as to the implementation of its requirements.

So just what do employers need to know? The Business Journal brought together experts to help answer that question Friday morning at the Airport Marriott in Greensboro.

The panelists were Allyson Labban, an attorney with Smith Moore Leatherwood’s health care practice group; Dr. Grace Terrell, president and CEO of Cornerstone Health Care; and Todd Yates, managing partner of employee benefits services firm Hill, Chesson & Woody. …

… Here’s some of what was discussed:

• What’s the date I need to know? 2014. That's when both the employer and individual mandate will take effect.

Health care systems and universal health care (Photo credit: Wikipedia)

• What’s the threshold? Employers with 50 or more employees will be required to provide health insurance to their workers or pay a penalty. Firms with fewer than 50 employees are not required to provide coverage, but could elect to do so through state or federal exchanges being established. However, all individuals will be required to have some form of health insurance.

• Do companies with more than 50 employees have a choice to pay or play? Yes. Businesses with more than 50 employees need to decide if it makes financial sense for their company to pay the penalty and let employees purchase their own insurance. On the flip side, many studies show that offering benefits is a good way to attract and retain talented workers. “We’re encouraging folks to crunch those numbers now and think ahead,” Yates said.

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What’s the penalty per employee? Terrell said for larger employers that choose not to provide insurance, the average fine per employee would be about $2,300. Part-time and seasonal employees are exempt, Yates said. For more specific information regarding employer penalties per employee, Labban suggested reading the “Summary of Potential Employer Penalties Under the Patient Protection and Affordable Care Act,” a report from the Congressional Research Service.

• Who’s levying the penalty? Just like any other tax penalty, the Internal Revenue Service will be the enforcing body behind the penalty. …

• Is the penalty tax-deductible? No.

• Can my existing health care benefits plan be grandfathered in? Yes, as long as it meets certain requirements.

• What about the exchanges? It’s not clear yet whether North Carolina will accept federal funding to organize its own electronic insurance exchange, or if the federal government will step up to the plate. …

• What if individual companies, each with fewer than 50 employees, have the same owner? That owner will be responsible for providing benefits. If there are multiple companies under the same control group, they’ll be considered one, Yates said.