Experts Help Business Community Understand New Health Laws

With the nation’s sweeping healthcare overhaul drawing closer, many small business owners are still uncertain how the new legislation will impact their companies.

For answers, nearly 200 Dallas-area business men and women turned to healthcare experts speaking at a recent forum sponsored by the Naveen Jindal School of Management. The forum, “Healthcare Reform in Texas: How the Affordable Care Act (ACA) Will Impact Small Employer Health Insurance,” was the second in a series of events designed to help small business owners navigate the coming changes in health insurance. Many of the changes were originally set to take effect on Jan. 1, though some have been delayed further.

“The world of healthcare is on the cusp of undergoing tremendous change,” said Dr. Forney Fleming, forum moderator and director of the Jindal School’s Master of Science in Healthcare Management Program. “I think that 10 years from now we will look back on our current healthcare system and we will not recognize it from either the standpoint of how healthcare is delivered or from the financial standpoint of how it’s paid for.”

Although the law was passed in 2010, many of the components of the overhaul have yet to be implemented.

“The ACA is a component, but I think it serves mainly as a catalyst for change because the real engine that is driving the need for change is cost. Cost has been totally uncontrollable for many years,” Fleming told the audience.

Between 1996 and 2006, healthcare spending more than doubled, according to Joyce Gaines, senior benefits consultant at Alkali Benefits and Insurance Services.

“The cost of an appendectomy can be all over the map. It can cost almost nothing or it can practically cost you your first-born child,” Gaines said.

The act intends to regulate costs and ensure all Americans have access to quality, affordable healthcare. But many small and mid-sized business owners – the group panelists say the act will impact the most – are confused about the law’s implementation and requirements.

“With legislation that is this sweeping, this global, this comprehensive, there are going to be some unintended consequences that all stakeholders are going to have to deal with,” Gaines said. “I think we’re going to see some cost shifting to young healthy people as well as to small businesses, and I think that’s one of the unintended consequences.”

The changes include online health insurance marketplaces, known as exchanges, which are set for enrollment to begin Oct. 1. Only businesses with 50 or more full-time employees will be required to provide health coverage. They are required to either offer “qualified” coverage or pay a penalty, and are subject to another penalty if the coverage they offer is “unaffordable,” which is defined as more than 9.5 percent of the employee’s W-2 income. To avoid some requirements, Gaines said many small companies are considering self-insured health plans.

Employers who don’t provide affordable health insurance could face one of two penalties, which Gaines describes as “the sledgehammer” or “the scalpel.” The “sledgehammer” penalty, she said, would be levied against companies with more than 50 employees that offer no health insurance and would cost $2,000 per full-time employee (after the first 30). The “scalpel” penalty would be applied to companies that do offer coverage, but require employees to contribute more than 9.5 percent of their family income. These companies would be fined $3,000 for each employee who qualifies for, and accepts, a premium subsidy for coverage purchased through an exchange.

Fleming says he plans to host more forums as the government reveals more information about the new rules. “Many of the answers are still not out there, but as the answers become more evident, we will be presenting more of these seminars to benefit the business community,” Fleming said.