America’s businesses are facing major changes in their health insurance programs, both for the currently employed and for retirees, because of President Obama’s health care overhaul.
Paul Dennett, senior vice president of the American Benefits Council, says businesses of all sizes are facing significant challenges in adapting to a new world of government requirements for the coverage of dependents, limits on Health Savings Accounts (HSAs), and requirements on deductible levels and the total actuarial value of a plan’s coverage.
“Now that health reform is completed in the legislative phase, and far from complete when it comes to the regulatory phase, the first priority for employers is to ensure their compliance with the new law, which is a daunting task,” Dennett said.
Rising Reporting Costs
According to Amanda Austin, director of federal policy at the National Federation of Independent Business, the health care legislation will increase burdens for small businesses while offering only small steps toward curbing rising costs.
“At the end of the day, we felt like this bill really was more about coverage; it did very little in terms of addressing the problems of cost,” Austin said.
Austin notes much of the problem for member companies of her organization is the burden of new red tape and filings required by the new health care legislation. Employers will be legally required to report expenditures at a much higher level of detail starting in 2012.
“Our member organizations are already spending on average approximately $100 per hour just in the costs of reporting under existing regulations and federal paperwork requirements,” Austin said. “This legislation is going to have a significant impact on that, and not in the right direction.”
Incoming Regulatory Requirements
With the health care legislation signed into law, there are a multitude of regulatory steps the Department of Health and Human Services must take in terms of applying the law to employers. These regulations could make a major difference in the effect on businesses and individuals.
“We worked very hard to keep requirements for small employers at a level where coverage will be affordable, and to achieve that by keeping the coverage requirement at a reasonable level, but much of that depends on the regulatory process within HHS,” Austin said. “We’re very concerned about what HHS is going to require of individuals and small employers, and even though the legislation is passed, we just don’t know yet what those regulations are going to look like.”
According to Dennett, employers who fail to meet the new requirements will bear heavy consequences.
“There are tremendous new administrative costs and regulatory requirements. As a general rule, large and small employers alike will have to pay much, much closer attention to what they’re doing than they had in the past, or face the prospects of fines and penalties,” Dennett said.
Benjamin Domenech ([email protected]) is managing editor of Health Care News.