What remains unanswered for businesses?
What remains unanswered revolves around how this law is going to be regulated and how much the government will pay attention. At this point, it's such a huge undertaking that I think at least for the short term, the Feds will just want to see that an employer is making their best effort to comply and that corrective action is being taken when they are found to be out of compliance.
Additionally, as the regulation writers, who are expected to issue interpretations of the law, dig deeper into how it should be regulated, there may be changes that nobody has even thought about today. It's a crap shoot, I think. And given the "fiscal cliff" that looms on the horizon with the government, nobody can predict with any accuracy whether or not some parts of the law will be "unfunded" by the congress, essentially rendering those parts useless. So only time will tell.
Are costs for businesses to provide insurance to employees going to increase?
In a word, probably. Adding benefits and having previously uncovered employees forced to join the plan can do nothing but raise costs. That's why it's imperative for employers to look to the expertise that exists in the market from those that deal with these things every day.
Many employers will be looking to self funding their plan in order to avoid some of the regulations in the law and to take control over their destiny as opposed to relying on a fully insured plan over which they have no control. So there are options out there and ways for employers to deal with these changes, but they have to be willing to investigate, find the right options for them and enact those changes.
This is where Cypress can help. Our clients nationally experienced costs that are 31 percent below national averages for health insurance and have limited their year-over-year cost increases to 3 percent annually over the last five years.
Our clients have been willing to make changes to their plans, enact appropriate cost control measures and find ways to engage their employees, but it only gets done if the employer becomes willing to consider the necessary changes to their benefit offerings. I think you'll see more and more employers looking to make those changes.
What's in store for the public?
Probably the biggest thing is that if they don't have coverage today they'll be required to do so, or pay the penalty for eschewing coverage. Most of the uninsured in the country are so because they have chosen to do so, not because they just can't get coverage, despite what you've been told by the supporters of PPACA. Many may choose to pay the penalties rather than take on the expense of required coverage (ironically, the penalties are far less costly than buying coverage for many).
Some employers have already talked about reducing hours worked for employees to below the 30-hour "full time" definition so they won't be required to offer health benefits. I believe the CEO of the Papa John's Pizza chain recently came out and said that's his plan, so people may see lower income rates as a result.
Another big question is whether or not the public will have access to coverage via a state health exchange and whether or not those exchanges will be cost competitive for them. Wisconsin, for example, has decided not to sponsor an exchange.
Distributed by MCT Information Services
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