News Column

Health Care Expert Explains Reforms to Business Owners

March 6, 2013

Ross Farrow, Lodi News-Sentinel, Calif.

health care reform

Did you know that health insurance premiums for individuals under 40 years of age will increase by an estimated 75 percent next year?

Or that a federal excise tax of $500 for the first year and increasing amounts will be charged for fully insured plans? It will be like paying an excise tax on your tires.

These and other major changes are in store next year as the bulk of President Barack Obama's new health care plan goes into effect, according to a consultant who spoke to business leaders on Tuesday morning.

Dave Fear, co-founder of a Roseville consulting firm, said he's read all 2,700 pages of the health care plan, but not all the regulations have been released. And they sometimes change daily.

Fear just returned from a four-day session with the National Association Health Underwriters in Washington, D.C. to learn the latest on the nuances of the health care plan.

"I'm not a politician, and I'm not an attorney," Fear said to get the Tuesday morning audience of business people warmed up. "When I have trouble sleeping, I sit down and read it, and it puts me right to sleep. I've never seen anything like it."

Fear gave his presentation at a seminar at Oak Ridge Winery on Victor Road. It was sponsored by MCV Insurance Producers.

Obama signed the new health care plan on March 20, 2010, and the U.S. Supreme Court voted 5-4 on June 28, 2012 that the court cannot rule on the plan's legality. A majority of Supreme Court justices said that if Americans want to change the law, they need to approach Congress.

Under the Obama plan, everyone is entitled to "affordable" health coverage, whether they are employed or not. If an employer doesn't provide insurance, employees must purchase it themselves.

Children may be on their parents' insurance coverage until age 26, and nobody can be turned down for coverage due to a pre-existing condition.

For individuals, all American citizens and legal residence will be required to have health insurance or pay a tax, Fear said. The penalty, starting Jan. 1, 2014, will be 1 percent of the family's gross household income in 2014, followed by two percent in 2015 and 2.5 percent in 2016. Otherwise, the individual must pay a flat amount of $325 per person in 2015 and $696 per person the following year. They will be charged for whichever formula has a higher tax.

Several categories of people will be exempt, including those who have religious objections, are incarcerated, have an income less than the Federal Poverty Level, are a member of an Indian tribe or have no income tax liability.

Under the plan, employers are not required to provide health care insurance for seasonal and part-time workers, Fear said.

Fear defines part-time employees as those who work fewer than 30 hours per week. Seasonal employees include farmworkers and store employees working extra hours during the Christmas holidays but who worked fewer than 120 days or 720 hours during the previous year.

"Field workers may work 10 to 12 hours a day for three months," Fear said in defining a seasonal worker.

Regulations will also depend on whether a company is classified as a "large employer" or a "small employer."

Large employers, with the equivalent of 50 or more employees who work at least 30 hours per week, must meet a "minimum value standard" at a cost that is "affordable" to employees, Fear said.

The "minimum value standard" will require large employers to cover at least 60 percent of the total allowed cost of benefits covered under the health plan.

The word "affordable" is defined by the federal government as costing employees no more than 9.5 percent of the employee's annual salary or 9.5 percent of the hourly wages, Fear said.

Affordability only applies to the employee's coverage, not for the spouse and children, he said.

"There are a lot of unknowns and lack of knowledge because it is so complex, and it is so polarizing," said Lodi resident Joe Cataldo, a farmer who attended the seminar. "A lot of it is a work in progress."

Liz Bokisch, who owns Bokisch Vineyards, said Tuesday's seminar was the second she's attended.

"We're just going to have to make it work," she said.

Ali Britschgi, a certified health coach in Lodi, added, "It's still confusing. I think everybody needs to be aware of all the changes that are coming."

Source: (c)2013 the Lodi News-Sentinel (Lodi, Calif.). Distributed by MCT Information Services.

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