Employer Mandate, Individual Mandate & Health Insurance Exchanges: 7 Things for ASC Owners to Know
The rules, regulations and cost of employee benefits will fluctuate over the coming years based on healthcare reform's individual mandate, employer mandate and health insurance exchanges.
"There are a number of things coming down the pike with human resources that surgery center leaders need to know about," says Tom Jacobs, CEO of MedHQ. "Benefits are usually a big cost for providers and most ASCs do offer some type of health insurance for employees."
Mr. Jacobs discusses seven PPACA issues that will impact ASC employee benefits in the future.
1. Employer mandate delayed. The Obama Administration has delayed the employer mandate — a provision that requires businesses and companies with 50 employees or more to offer employee health benefits or pay a penalty — by one year. Originally set to begin Jan. 1, 2014, the mandate will now take effect in 2015.
"Delaying the employer mandate sounds like we are off the hook for another year, and really that isn't the case," says Mr. Jacobs. "There are still a dozen or more things employers need to be aware of that will impact them."
The government expects to publish proposed rules and more detailed information on the Patient Protection and Affordable Care Act's employer coverage mandate later this year after meeting with large employers and other stakeholders. According to the Congressional Budget Office, the delay will cost the government $12 billion.
2. Individual mandate was upheld. Since the Supreme Court upheld the individual mandate last summer, it's likely this provision will still go into effect. The individual mandate requires all people to seek insurance either through their employers or on the health insurance exchange.
"If an individual employee of the ASC goes to the exchange and tries to enroll in benefits, that will cue up a red flag that the employer doesn't have a plan that meets the requirements," says Mr. Jacobs. "That puts the employer in an awkward position because if they are offering a plan, that visit to the exchange could touch off several administrative processes that aren't going to be fun."
Clearly educate employees about your insurance plan and make it clear that your plan meets coverage requirements of the Affordable Care Act. With the proper health plan provisions, employers can mitigate the risk of becoming burdened with this issue. Health insurance exchanges are expected to begin enrollment Oct. 1, 2013 and go into effect Jan. 1, 2014.
3. Employee notification of health plans. Large group employers with 50 or more full time employees (or equivalent) must notify their employees about the health insurance exchanges and whether the employer-offered health plan meets federal requirements. There are several points that must be mentioned in that correspondence.
"You need to be sure you are following the rules and sending out the exchange notice," says Mr. Jacobs. "Check with your legal counsel to ensure the requirements are met. After Oct. 1, you have to send that letter out to new hires within 14 days of hiring them going forward."
4. Requirements to offer coverage under ACA. Health plans now must eliminate pre-existing conditions. There is also a prohibition on spending limits as well as new fees and taxes along with employee wellness program rules.
"All these things did not get delayed; they are still in effect and apply to large and small ASCs," says Mr. Jacobs. "ASCs can seek help from a number of different providers, including HR consultants, insurance brokers, attorneys, consultants, accountants or other advisors that are aware of these requirements. There is also a maximum of a 90-day waiting period for medical insurance eligibility that wasn't there before."
5. Obscure rule changes will make a difference. There are several obscure rule changes that could have an impact on the surgery center. A few of these changes include:
• Extending Control Group Issues, IRS Section 414 — these rules previously applied to 401k plans and now will apply to health plans as well.
• Multiple employer arrangements — if you have benefit plans crossing over from ASC to the physician practice, for example, depending on how the entities are related, you may need to address new requirements to file a report regarding a multiple employer welfare arrangement with the department of labor.
"There are many new requirements for all business owners to be aware of," says Mr. Jacobs. "It will take some time and effort to understand how these changes are going to impact our businesses."
6. Insurance rate hikes. After exchanges hit, some are predicting insurance rates will skyrocket. A recent Wall Street Journal report said the individual market rate in California and Ohio could nearly double.
"The report on small group plans and large group plans are that significant increases can be expected," says Mr. Jacobs. "For small group plans, you might be looking at a 50 percent increase. For large group plans, a 25 percent increase. We know a number of new taxes and fees that will most certainly increase premiums of what carriers charge."
An estimated $25 per employee per month charge increase is likely to cover new fees and taxes. "As people look for ways to address that, some business are thinking along the lines of self-funding," says Mr. Jacobs. "That can be complicated, so if you go that way be aware of what self-funded plans entail."
7. Opting out of employer coverage. Due to rate increases, some employers are considering opting out of employee coverage and taking the penalty instead because paying the penalty would be cheaper. However, this could leave employees with unfavorable options on the exchange.
"Nobody knows for sure, but there have been predictions that the value equation for plans on the exchange won't be as good as the employer-offered small group plan," says Mr. Jacobs. "You might be giving employees a less attractive benefit, and many businesses depend on their insurance plan to help attract great employees. If you are doing something to diminish the health plan, you might not attract those employees."
More Articles on Surgery Centers:
50 Things to Know About the Ambulatory Surgery Center Industry
Are ASCs Prepared to Win in the Future Healthcare Marketplace? Q&A With Lee Lasris
Eliminating Payer Leverage in Surgery Centers: Q&A With Dr. Keith Smith of Surgery Center of Oklahoma
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