Healthcare Compliance concern for employers Why are form mandates leading to anxious leaders?
Most employers but especially those with numerous lower-paid employees are getting worried about the combined effect of upcoming healthcare reform law provisions that they fear would hurt their competitive position. While these employers do not seem to be planning to drop employee health coverage completely they are exploring strategies that could reduce the impact of the changes on them — and affect health insurers in the process. Let’s talk about reform mandates and the feelings they may be evoking throughout your organization.
Reform Mandates May Be Driving Anxiety Through The Roof
Reform mandates seem to be one of the most popular ‘water cooler’ subjects recently. Another concern for employers relates to the provisions requiring auto-enrollment in coverage for full-time workers. Both the administrative aspects and the reaction from employees who are having deductions taken from their pay without authorizing them is a viable source of apprehension. Furthermore, employers cite worry about both the requirement that plans must pay at least 60% of actuarial value for covered services and that all employees working more than 30 hours per week must be eligible for health coverage.
Consequently, employers may change their work-force strategy so that they have fewer employees working more than 30 hours per week and therefore requiring health coverage while others might consider making part-time workers eligible for the health plans of full-time employees. Generally employers don’t want to reduce health coverage, but they are prepared to lower the value if competitor employers do. 32% of employers plan to reduce spending on dependent health coverage.
Under the Affordable Care Act, employers have financial liabilities if their coverage is deemed not affordable or not meeting the minimum value. However, one problem the employers are facing in preparing for this is that the affordability and minimum-value concepts have not yet been adequately defined. Health coverage is deemed unaffordable if it costs more than 9.5% of household income. Employers of low-wage workers are concerned that if they made coverage affordable to workers under the 9.5% requirement, it might not be affordable to the employers. Additionally, employers fear that their employees may decide not to buy health coverage costing 9.5% of their income.
Again, in general, employers are not looking to drop coverage, but are very concerned with such requirements as coverage for part-time workers. Many of them are interested in developing a new insurance product for those workers that both is affordable and in compliance with the healthcare reform law’s requirements.
But small employers also now know that these employer mandates apply only to those with more than 50 workers – hence, employers may think long and hard before they hire that 51st worker.
