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HealthCare – What Small Businesses Can Do

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HealthCare – What Small Businesses Can Do

 

In the midst of the ever-changing healthcare environment I find that small business employers are having a more difficult time keeping standard healthcare plans in place. The definition of a small business employer is 50 employees down to 2 employees. What I have found is that small business employers are continuing to increase deductibles and out-of-pocket costs for their employees. This is all well and good due to the fact that the rising cost of healthcare is something that small business employers cannot afford but keeping strong health plans intact is important.

 

While Health Savings Accounts (HSA) are something the small employer can take into account for their businesses I find that many employers could pay more for an HSA than a standard healthcare plan. The reason is HSA’s can actually end up being more expensive in the long run if their employees happen to have a catastrophic or chronic illness or the premiums are high because the insurance company prices the plan high due to their liability after the deductible is met.

 

I recommend that employers put into place a $1000, $1500 or $2000 deductible with an out of pocket maximum anywhere from $4-$6000 on an in-network basis and keep the office visit and prescription drug co-pays in place.

 

I do like the utilization of a Health Reimbursement Account (HRA) as well. You could implement an HSA or a high deductible plan and put in place an HRA, but I would recommend this only if you have 25 or more employees, otherwise the employer loses money if the HRA is used to often by the employees.

 

Healthcare reform has helped employees recognize the importance of wellness visits by implementing no-copay for wellness visits. Also there are no maximum lifetime limits and the benefit increasing the age for child and military coverage.

 

I do not see that healthcare reform will be the way of the future. Why? Because it takes away the free enterprise of insurance. I say the government needs to back away from the involvement and let the insurance companies do what they do best (but implement further guidance) which is manage healthcare and provide healthcare benefits for the population. This overplay by the government does not lead to a democratic society, it is our responsibility as citizens to manage our own healthcare and to utilize the system that may be slightly broken at this time, but with improvements definitely can be beneficial for the long term. Keep healthcare reform at bay and let free enterprise continue.

 

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18
JAN
0

Categories: Health Insurance, Healthcare, HealthCare Reform, Small Business

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Healthcare – What it Means for Small Business

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Healthcare – What it Means for Small Business

Healthcare Reform:

Affordable Care Act (ACA):

 

On June 28, 2012 the Supreme Court declared the individual mandate to be
permissible exercise of Congress’s taxing powers under the Constitution.

 

The mandate was not a penalty, but a tax and was allowed under Congress’s
power to tax under Article 1 of the Constitution.

 
The Court held that the Medicaid portion of the Health Reform, which requires states to accept an enormous expansion in the number of people they cover under the program or face a cut of all Medicaid funds, was unconstitutional as enacted, but found that the expansion could go forward without the threat of the loss of all Medicaid funds.

 
So what does this mean to the small employer? Well for starters here in the state of Illinois, Governor Pat Quinn just signed into effect that Illinois will have a State Exchange. This would mean by October 1st of 2013 individuals and small groups would need to be signing up for the exchanges for the implementation date of January 1, 2014.

 

The problem is that the infrastructure is not even close to being in place and I certainly would not want to be one of the first ones to jump into the exchange!

 
Small employers should look very closely at all the implications to having the exchange in place. Work closely with your CPA there are more tax laws and filings that will need to be done – Even Now – here in 2012 – make sure your accountant keeps you aware of what needs to be reported. For instance in 2012 you will now need to report and do the following:

 

  • Prepare for mandatory Form W-2 reporting for health coverage,
  • Distribute the Summary of Benefits and Coverage to enrollees for renewals, and
  • Distribute Medical Loss Ratio Rebates to participants, if applicable.

 
The small employer (defined as fewer than 50 employees unless the State of Illinois raises it to 100 employees) will need to stay on top of the many additional regulations to ensure they are in compliance.

 

Government run health care – as implicated in it’s name – means more paperwork and more reporting and more penalties for noncompliance. Watch for information and make sure to obtain it from credible sources.

 

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17
JUL
0

Categories: Healthcare, Small Business

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Has Healthcare Changed Forever? If so – for Better or for Worse?

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Healthcare Reform

Steven Ward, Senior Economic Writer for the Wall Street Journal had some interesting points regarding Healthcare Reform. I have paraphrased his thoughts below and added some of my own experiences with the employers I work with. This past year has been a tough one for increases. My recommendation is to always look at other carriers and shop the market. That is one of the beauties of a free marketplace. We have choices – we just need to find the right ones that serve employers and the public with quality and economical healthcare.

Reforming the Healthcare System

Under the Patient Protection and Affordable Care Act (PPACA) signed into law by the Obama administration in March 2010, we will be putting 30 million more people under the Medicaid system that will accelerate the demise of the healthcare system.

Whether we continue down the path of Obamacare or choose another path, either way we still have a massive problem with the cost of the healthcare system. Healthcare accounts for more than 17% of the nation’s GDP. Over the last 20 years the fastest growing areas have been government and healthcare. And those go hand-in-hand. In the next 20 years we could virtually spend all of our GDP on healthcare.

We have to have cost containment and new ways of paying for healthcare. If we don’t, we won’t have any industry. All we’ll have is healthcare and hospitals.

One of the big issues is how we pay for healthcare. We have increased pre-payment systems through hospitals. Basically giving a carte blanche array of services available to all. This is really the source of rising costs. We have the best hospital system in the world and the amount of progress that has been made with heart, stroke, cancer and other diseases has been phenomenal over the last 20 years. We obtain high quality of care. But we pay for it in a dysfunctional way. We all pay in advance for healthcare and it’s like going into an all you can eat smorgasbord, so it’s either paid for by the government or by you through the insurance plans you have chosen.

We need a whole new way to pay for insurance. Hospitals are merging and becoming large conglomerates again. Also insurers are buying healthcare providers. This means more consolidation in the healthcare industry. This becomes a double edge sword. On one hand it can mean lower costs when you have both a vertical and horizontal integration in a healthcare system but another implication can mean less competition and less competition can mean higher prices so could mean a real double edge sword.

We can’t afford to have health insurance growing 2-3 times higher than the rate of inflation on the cost of everything else we buy, because then you’re going to have more people uninsured because not as many people will be able to afford the insurance. Already most employers find the cost of health insurance is third in line to their bottom line cost. For many employers the cost of the product they are purchasing comes first, the payroll comes second and third comes the cost of insurance. What happens when the cost of insurance is first in line?

Obamacare has some good aspects such as kids staying on the program longer and no exclusions for pre-ex for younger people and eventually for all, plus no caps on life time benefits. But government’s involvement on the federal level has and will continue to be overbearing. If PPACA is repealed then the first act of the new congress and new president will be to have a new healthcare reform plan. The current one is driving costs up not down.

 

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12
DEC
0

Categories: Business Training, Health Insurance

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