by Merrisa Milliner, Marketing & Communications Director, Doeren Mayhew

A panel of health care and financial leaders cited the trending down of benefits costs among the measures businesses should be considering now as they prepare to navigate the complexities of the health care reform.

Sponsored by BBVA Compass, USI, top accounting firm Doeren Mayhew, Haynes and Boone, LLP, and The Aldridge Company, the panel discussion featured Dr. Richard Wainerdi, former Texas Medical Center president; Wendy Carmichael, USI vice president and ERISA counsel; and Brian Wells, CEO at Memorial Hermann Health Solutions.

Despite uncertainty in the marketplace and the recent postponement of key mandates to 2015, panelists said the ACA is here to stay, and encouraged businesses to keep preparations on their radars, including:

  1. Preparing for the Notice of Exchange due Oct. 1. Most employers (all those subject to the Fair Labor Standards Act) are required to provide employees with written information on the new Health Insurance Marketplace (formerly called “Health Insurance Exchange”) created by the ACA. Insurance carriers and third-party health plan administrators are not responsible for providing the notice on your behalf. While this requirement could be delayed in light of recent postponements of certain ACA mandates to 2015, be sure you are prepared to notify employees by Oct. 1 should it remain intact.
  2. Analyzing your situation and developing a tentative game plan. Although businesses with 50 or more full-time equivalent employees have more time to prepare thanks to the recent postponement of the so-called “play or pay” provision requiring them to provide coverage or face a fine, it’s wise to explore your options now and have the time you need to effectively implement them. Use your insurance brokers, consultants and CPAs to help you analyze cost for premiums versus what you may pay in penalties for not offering a plan. In addition to costs, think in terms of what the options will mean for employees and your ability to retain talent. While the ACA-created Health Insurance Marketplace may today look like a viable place to send your employees in lieu of offering a plan, there is still a great deal unknown about this option. Early indications point to highly restrictive networks among the tradeoffs employees would face. Houston, for example, may have only two hospitals participating in the Marketplace, so employers will need to consider whether offering a more competitive benefits plan makes sense for their business.
  3. Beginning to look for ways to trim benefits costs. Managing benefits costs should be an ongoing goal for your business, but is especially important in light the ACA, the additional costs it is expected to bring and the so-called “Cadillac Tax” set to go into effect in 2018. As it stands today, employers will face a 40 percent excise tax annually beginning in 2018 if plan costs for employees exceed a certain threshold. Assuming this provision stays intact, it will be important to consider now whether you need to begin trimming down your costs or simplifying your plan over the next several years.

The trend is toward incorporating elements of consumerism into health benefit plans, i.e., engaging employees in the process of lowering costs. Examples include:

  • Options such as high-deductible health plans and health savings plans that put some responsibility into the hands of employees to be good stewards of their health care spending.
  • Wellness programs that encourage preventative screenings.
  • Encouraging annual visits to a primary care physician.
  • Programs that incentivize employees to stay well, such as more vacation for fewer sick days taken.
  • Smoking cessation programs and higher medical plan contribution levels (subject to HIPAA’s wellness rules) for employees with high-risk health habits such as nicotine use. Some employers even refuse to hire tobacco users. While Texas does not protect smokers, there are states that do, so be sure to do your homework if you are considering this hiring practice and have employees working in other states.
  • Measures to reduce expensive urgent care facility visits, including high emergency room co-pays and education on what constitutes an emergency.
  • Advocacy services to help ill employee explore their options, make informed decisions and get health care faster.

While some of these measures may increase costs initially, preventing or catching illness early reduces costs in the long-term.

For assistance guiding your business through the complexities of health care reform, contact Doeren Mayhew’s CPAs in Michigan, Houston or Ft. Lauderdale.