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Entries in Health Insurance Reform (2)


Health Insurance Marketplaces Are Coming - Are You Ready?

What PEOs and Small Business Owners Should Know

With 2013 almost halfway over, our attention turns to 2014, when the Affordable Care and Patient Protection Act goes into effect. The individual mandate kicks in, requiring all Americans to purchase health insurance or face a fine. Employers with 50 employees or more will also face penalties of $2,000 per employee (the first 30 employees don’t count) for not providing a minimum level of health insurance coverage.

Small business owners, or employers with less than 50 full time employees (defined as 30 hours or more) are exempt from any penalties, fines or requirements to provide coverage to their employees. To the contrary, smaller businesses (defined as 25 employees or less) are rewarded for offering coverage to their workers. In 2014, companies can receive a credit of up to 50% of their premiums. The credits are calculated on a sliding scale which favors lower wage employers with 15 employees and less.

Most small business owners in America employ less than 50 full time employees. Those companies will not be subject to most of the provisions of the Affordable Care Act. This doesn’t necessarily relieve employers from any it’s responsibilities when it comes to guiding and assisting their workforce to comply with the individual mandate. Many lower wage employees will qualify for premium support in the form of credits that will offset their cost of coverage.

According to statistics compiled by the PEO Network, www.peonetwork.com, there are over 700 employee leasing, personnel management companies, and professional employer organizations operating throughout the United States. Approximately 90% - 95% of their client companies are firms with less than 50 full time employees. Many of their clients, small business owners, will be seeking the employee benefits and health insurance expertise these companies provide. PEOs are uniquely qualified to handle the additional compliance, reporting and analysis that business executives, HR professionals and tax professionals will require.

Health insurance marketplaces, formerly referred to as exchanges are being implemented in all 50 states. Some will be operated by the states individually, like California’s health insurance exchange called “Covered California” http://www.coveredca.com. Other states, like Florida, will introduce marketplaces which will be operated by the federal government, while other states will manage marketplaces as a joint partnership.

Are you ready?


Health Care Reform and Professional Employer Organizations

PEOs and Health Insurance Reform - What to Do?

In the past week, we have received almost fifty calls, e-mails and queries on discussion boards about the effects of the newly passed H.R. 4872 - Health Care and Education Affordability Reconciliation Act of 2010.

The simple answer is nothing.

President Obama and the Democrats are in the driver’s seat now that the reconciliation process is over. They have the big “MO” (momentum) in their corner, as a result of passing a bill, that is the first step, to securing the elusive dream of quality universal health care for all American citizens.

No Immediate Impact

The health care bill will affect businesses of all sizes in dramatically different ways.  Many provisions exist that will apply to companies that have fewer than 10 employees — and for those with fewer than 100. You might say there is something in the bill for everybody.

Dave Osterndorf, chief actuary of consulting firm Towers Watson’s global health and welfare practice told USA Today that “for small and medium business owners, the impact is not going to be immediate”. Maybe not Dave, but to quote one of my favorite singer / songwriters, the times, ….. they are a-changin.

The Times,  …. They Are a-Changin

Robert (Bob Dylan) Alan Zimmerman, 1963

Here is a look at some of the provisions and their effects:

For Employers

•By 2014, employers who have more than 50 employees must offer health insurance benefits or pay penalties. Companies with 25 or fewer employees who meet certain wage requirements will also be able to get credits toward health insurance purchases.

•By 2014, small-businesses owners, the self-employed and those who don’t get work-provided coverage can get benefits through Small Business Health Options Programs (SHOPs). These state-run marketplace exchanges will work with carriers to pool insurance options, with the hope that costs will be lower for a larger, more powerful, group.

•By 2018, high-end health plans with premiums of more than $10,200 for an individual policy per individual and $27,500 per family — not including vision and dental — would be subjected to a “Cadillac” tax.

The excise tax would be paid by employers that self-insure (most large firms do) and insurance companies, but small-business experts expect these costs to be passed along to smaller firms via premium increases.

For Employees

•Unhappy employees don’t have to stay in a job they hate for fear of losing health insurance for themselves or their children. Insurers can’t deny coverage due to pre-existing conditions for kids and in 2014 for adults.

•Within six months of the bill becoming law, the workers can keep kids on their insurance policies until they’re 26.

•Also within six months, lifetime caps on employer-sponsored insurance — often $1 million — would be removed.

Look for future updates on the effects healthcare reform will have on business owners, their employees and the employee leasing and professional employer organization industry.