As employers, employees and the unemployed across America continue to wrap their heads around new federal health insurance mandates – known to many simply as Obamacare — owners of local businesses, both large and small, were asking plenty of questions last week at a symposium designed to clue them in to the new rules and regulations and how it could affect their business models moving forward.
Experts at the event, “Taming Healthcare 2014,” gave a dose of advice to the business community Oct. 16 at the Inn & Spa at East Wind, offering tips for navigating the newly reformed health care system — which they described as a “moving target.”
Starting in 2015, businesses employing 50 or more full-time equivalent workers will be required to offer those employees affordable health insurance coverage or face penalty fees.
Andrew Mitchell, CEO of PBMC Health, delivered the keynote speech at the event – presented by the Riverhead Chamber of Commerce, the Riverhead Industrial Development Agency and Peconic Bay Medical Center. He said employers are required to offer an insurance plan that covers at least 60 percent of medical expenses, which is the same percentage covered by the lowest plan on the public health insurance marketplace. At the same time, the plan’s monthly premium must be no more than 9.5 percent of the employee’s household income – otherwise it is considered “unaffordable,” according to the reform law.
This means what is affordable to one employee may not be to another, which in turn means added paperwork and oversight for employers to ensure they are in compliance, said Alysia Doerbecker, senior district manager for ADP payroll services.
“There is a laundry list of information that you need to be prepared for,” Ms. Doerbecker said.
As a result, she said, a proficient human resources system to keep tabs on all the information could be vital.
Should a company slip up, it may be subject to penalties or open itself to a lawsuit, said John Hudson, president of True Benefit, LLC, an employee benefits brokerage and consulting firm.
After 90 days, new employees become eligible to join the company’s health care plan, should they offer one, Mr. Hudson said. “You better track [those] employee[s] accurately. If they should have been offered coverage, it’s going to come back to you as an employer from a lawsuit perspective.”
To enforce the new regulations, Michael Vigliotta, an attorney at The Law Offices of Thomas M. Volz, said the Internal Revenue Service is hiring more than 6,500 new employees to ensure businesses are in compliance.
Susan Flatley, manager of North Fork Radiology, which has 60 full-time employees, said she was expecting added oversight, “but not to the extent of what I heard here today.”
And for those considering not offering affordable care, “the penalties are larger than I had anticipated,” she said. The penalty is generally equal to $2,000 for each full-time employee, excluding the first 30 employees. Should an employee enroll in the marketplace and qualify for a government subsidy, additional fees could be incurred.
Bruce Talmage, owner of Talmage Agway in Riverhead, has about 17 full-time employees, which puts him in the small business category.
“It sounds like I am not required to provide a health plan, but I currently do, and I am trying to understand the rules,” Mr. Talmage said. He said many of his questions have to do with his ever-changing work force because the store gets busier during the spring and summer landscaping seasons.
Talmage wears an interesting couple of hats, as he’s also involved with the nonprofit Riverhead Volunteer Ambulance Corps, which has about 17 full-time employees. While the nonprofit has not offered health coverage in the past, he said they are looking into getting it.
As a small business, he is not required to offer health insurance, but there are tax incentives for small businesses that do so, according to the Small Business Assistance Program, a state-run nonprofit supporting affordable health insurance.
“If I do continue to offer one, does it have to be to every single employee? Is there a limit on the number of hours they work?” Mr. Talmage asked.
According to the law, as long as his work force does not exceed 50 full-time workers for more than 120 calendar days, he will still be considered a small business.
Raising even more questions for Talmage, the insurance plan he currently offers his employees will no longer be offered come Jan. 1, so it’s as if he is starting at square one, he said.
There are also unanswered questions on the health care provider side.
An estimated 57 million uninsured people stand to gain access to affordable health care, however there are already shortages of primary care physicians to provide it, said Dr. George Ruggierio, chief of family medicine and director of medical education at PBMC.
“Primary care physicians are already under strain. Who’s going to see these people?” Dr. Ruggierio said.
The U.S. Department of Health and Human Services estimates that the physician supply will increase by only 7 percent in the next 10 years, far less than the more than 36 percent increase in the patient population, according to the Association of American Medical Colleges.
“There are concerns across the board – the insurance industry, hospitals and doctors trying to deliver care,” Dr. Ruggierio said.
Unfortunately, not all of the questions are answered yet, said Randy Blum, a representative from United Healthcare – an insurance provider offering coverage on New York’s insurance exchange. “At this point nobody knows what’s going to happen.”
While much remains uncertain for health care providers, small business owners seeking the right plan and employees themselves, Lauren McKissick, owner of Prominent Swimming Pools Inc. of Calverton – which has just a handful of employees – said that either way, she believes offering health benefits is important to keeping loyal employees.
“You don’t want to lose good people over insurance issues,” she said. “But is it going to be more affordable to workers if we break off and no longer offer it?”