The House Small Business Committee Is Worried about Implementation too

It’s not just Senator Baucus who is worried about how health reform is affecting our nation’s smaller employers. The House Small Business Committee held a hearing to discuss PPACA implementation this week too.  During opening remarks, Chairman Sam Graves (R-MO) expressed serious concern over the impact of employer rules, high costs and inevitable staff cuts that will occur as a result of the health reform law. Ranking Member Nydia Velazquez (D-NY) acknowledged the fact that insurance premiums under the health reform law are likely to increase but wanted to discuss ways to improve the take-up of small business tax credits.

Many of the committee’s concerns regarding the impact of PPACA on small businesses echoed many of NAHU’s. Specifically, Doug Holtz-Eakin, former director of the Congressional Budget Office, noted that we are still unaware of the true economic impacts of the law. He stated that the law will cost “$24 billion and 80 million hours of paperwork… Eighty million hours of paperwork time spent complying with those regulations, to give you some perspective, that’s 40,000 full-time employees filling out paperwork for a year nonstop.”

A small-business owner who, on behalf of NFIB, testified at the hearing said that the 30-hour requirement is the most detrimental employer requirement because many employers will cut hours to employees so they don’t have to pay the benefits. It is not that the employers do not necessarily want to offer their employees coverage; it is that they cannot afford to. The CFO of another very small business also testified during the hearing. In this case, however, the small business applied and received tax credits made available under PPACA. As a result, for the first time ever, this company’s costs went down 12%.

The law’s unpredictability was discussed, specifically in terms of the challenges it poses to consumers and small businesses. If the law itself is not stable, it becomes increasingly difficult for small-business owners and employers to keep up with the influx of new rules and regulations, which in turn makes implementation and compliance an even greater challenge. A whopping 97% of the nation’s small businesses have fewer than 50 employees. Representative Kurt Schrader (D-OR) highlighted that something had to be done within the law to make compliance with PPACA more feasible for businesses with less than 100 employees. The devise tax was also brought up as an area of concern, mostly because there is a general misunderstanding of the tax and the full impact of it is still not fully known. Insurance premium cost differences between the young and the old and what that means for small businesses was a hot topic during the hearing too.

Smokers and the New Health Care System

The ACA will be expensive for smokers. Under a provision of the federal health care law, states can allow health plans to charge tobacco users up to 50 percent more for their health insurance premiums. The provision allowing for a “tobacco surcharge” was designed in part to encourage smokers to quit. But critics say the smoker’s surcharge is discriminatory, which goes against the spirit of The ACA. A low-income person buying a $6,000 policy who qualified for a subsidy might see the price of the policy drop to $3,000, but the tobacco surcharge would knock it back up to $6,000 again.
The Center for Disease Control puts the nation’s annual price tag for smoking at more than $190 billion in medical care and lost productivity. Nearly 20% of people in the United States still smoke.

Higher Premium Rates and Less Employer Coverage under Health Reform

Let’s take a look at the technical name of the health   reform law – the Patient Protection and Affordable Care Act. The law,   which seeks to expand affordable health coverage to all Americans, isn’t   exactly going as planned. While we have been saying this from the beginning,   it seems that everyone else is just getting the memo. Several recent studies   have indicated that health insurance premiums will, in fact, likely rise   under health reform, which will unfortunately result in some employers   dropping coverage for their employees. HHS Secretary Kathleen Sebelius even   admitted this last week. In a statement, she noted that costs will likely in   the individual market as a result of health reform.On Thursday, the Robert Wood Johnson Foundation released a study showing that employer-sponsored coverage   has dropped dramatically over the last decade. In 2000, about 70% of   employers provided coverage for their employees; by 2010, that percentage   dropped to 60%.

This accounts for a change of 12 million people losing health insurance   coverage. In the private sector, employers offering coverage fell to about   52% in 2011 from 59% in 2000. While unemployment rates also rose over the   course of this study and account for at least part of the declined rate, the   price of insurance coverage is still largely at fault. While we see this   issue everyday, the study also sheds light on the fact that the average   annual premium for individuals with work-based coverage doubled in the last   decade, from about $2,500 to about $5,000. Unsurprisingly, family premiums   also skyrocketed from about $6,400 to $14,500. While these rates vary by   state, no state saw an increase in employer-sponsored coverage over the last   decade. Michigan, Indiana and South Carolina, for example, saw the steepest   declines in employer-backed coverage, at about 15 percentage points each.

PPACA, however, is supposed to cover 27 million more Americans over the next   decade. That, taken with the 12 million who lost coverage in the last decade,   adds up to 15 million more Americans covered as a result of the law. Health   reform, however, has experienced several bumps in the road since the   Administration started rolling out regulations and drawing blueprints for the   exchanges. These bumps have already resulted in higher costs and delayed   implementation deadlines that ultimately exacerbate the healthcare issues in   this country.

Consumer Groups upset about delay

Consumer Groups Protest Delay Of ACA Out-Of-Pocket Expense Cap.

Kaiser Health News Share to FacebookShare to Twitter (4/10, Appleby) reports that several consumer groups are asking the Obama Administration to reconsider its decision not to enforce the Affordable Care Act provision capping out-of-pocket expenses an insurance plan can ask an individual to pay. Under the ACA, the “out-of-pocket cap…is estimated to be about $6,250 for an individual.” However, groups including the American Cancer Society warned that because of the delay, “insurers and employers may be able to keep offering health plans next year that include out-of-pocket caps for individuals of $12,500 or more.”

Clarification for Small Business Owners

Clarification for Small Business Owners
A high percentage of small business owners do not understand the Affordable Care Act (ACA) health insurance mandate, according to recent surveys.
Following is clarification of the ACA mandate for the small business owner:
  1. Small groups do not need to offer or provide coverage.
  2. Large groups must offer coverage to full time employees and dependents (defined as children not spouses) or be subject to a penalty. (often referred to as Play or Pay)
  3. Individuals must have coverage (the “individual mandate”) unless they are covered through their employer or some other source.  If they do not have coverage, the penalty in 2014 is $95 or 1% of income for each individual.
Q. What is a Large Group for determining if they must offer coverage?
A.  A Large Group is a company that has 50 or more Full Time Equivalent employees.  Full Time Equivalent means a combination of full time employees (average 30 hours/week) and part time employees. Thus, for example, a group with 30 full time employees and 40 half time employees would equal 50 Full Time Equivalent Employees and would be required to offer coverage.
Q. Must a Large Group employer cover or provide coverage for all employees and dependents?
 
A. No. The Large Group employer must offer minimum value, affordable coverage to all Full Time employees and their dependents (defined as children not spouses). Offer means that the full time employees are given an opportunity to enroll. Minimum value coverage means that the plan covers at least 60% of medical expenses. Affordable means that the cost of employee only coverage cannot exceed 9.5% of that employee’s W-2 wages. 
Please contact us for more information about Employer Shared Responsibility/Play or Pay.
Surveys also reveal that a majority of small business owners are not able to define the meaning of an Exchange.
(In California the Exchange is called Covered California.)
Q. What is an Exchange?
 
A. In general, an Exchange is a marketplace where individuals or small groups can buy health insurance.   The Exchange is an alternative to the traditional private marketplace.  There are two types of Exchanges under Covered California.  The Individual Exchange and the SHOP (Small Group Health Options) Exchange.
Q. Who will sell insurance within Covered California?
 
A. Although not yet finalized, some of the insurance carriers, but not all, who sell insurance currently in the private market, will also offer health insurance through Covered California. 
Q. Will there be savings for small employers in the SHOP Exchange?
 
A. Rate information is not yet available.  The SHOP Exchange officially opens for enrollments October 1, 2013.
Q. Are Small Groups required to purchase their coverage through the Exchange?
 
A. No. Small Groups and individuals are not required to go through the Exchange for coverage. They have the right to continue obtaining insurance in the private market as they have prior to the reform law.
Q. Will there be savings for individuals who purchase health insurance through the Exchange?
 
A.  For those whose income is up to 400% of the Federal Poverty Level, financial assistance may be available when health insurance is purchased through the Exchange.

California health exchange to create 500 call center jobs in Rancho Cordova

CalifCalifornia health exchange to create 500 call center jobs in Rancho Cordovaornia health exchange to create 500 call center jobs in Rancho Cordova
The Sacramento Bee by Peter Hecht –
March 23, 2013:


City and state officials confirmed Friday that Covered California, the organization instrumental to carrying out the federal health insurance overhaul in California, has signed a local lease to open a state service center on White Rock Road in Rancho Cordova.

“We welcome them,” said city economic development director Curt Haven. “They complement our other companies located in Rancho Cordova. We have a ready and willing workforce that will easily fill those jobs.”


The Covered California call center is expected to open in August. Its 500 employees, including call center agents, managers and technology specialists, will work in a city that is already home to call centers for Dignity Health, Sutter Health, Delta Dental and Vision Service Plan.


The nearly 60,000-square-foot Rancho Cordova site will be one of two statewide call centers for Covered California. A second state center is expected to be announced for another Central Valley location. And Contra Costa County will be the site of a Covered California call center in partnership with the state’s 58 counties.


“We’re just really happy that we are going to be able to move forward on this,” said Covered California spokesman Dana Howard, adding that he expects the Rancho Cordova site to be fully staffed by this fall. “This really allows Covered California to move forward with getting the millions of uninsured in California enrolled with affordable health coverage. We have a tight window to do this in. And this is just a huge milestone.”


The national Affordable Care Act, signed into law by President Barack Obama, requires state health care exchanges to be up and running by 2014.
Before Jan. 1, Covered California, which recently received a federal grant of $674 million, plans to use some of its funds to develop a website where customers can shop for insurance policies.


Covered California expects to create seven geographical exchanges reflecting different health care markets in the Sacramento region, Northern California, the San Francisco Bay Area, the San Joaquin Valley, the Central Coast, Los Angeles and the rest of Southern California.


The state health exchange will serve households earning up to four times the federal poverty level, equal to $92,200 for a family of four in 2012. State leaders also intend to expand Medi-Cal in California, relying heavily on federal dollars.


News of the new Covered California call center in Rancho Cordova comes six months after cable giant Comcast announced it was closing its California call centers – including a Natomas office that employed 300 workers.

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