The Port Arthur News
With less than a year to get their health insurance benefits in gear, employers of all sizes and kinds have some options to consider in order to comply with the Affordable Care Act.
A plethora of employers gathered at Ford Park Thursday morning to hear what would be expected of them come January 2014. Den Bishop, president of Holmes Murphy & Associates, a Dallas-based health care consulting company, gave a presentation Thursday about the options available to employers with the Affordable Care Act.
Lorenzo Fitch, vice president of BGI Contractors, said Bishop’s presentation was “enlightening,” but he thought that many more similar seminars would be necessary to ease employers through the transition.
“This is what we’re going to be confronted with, so there’s going to have be a greater understanding of how this whole process works,” he said. “It is complicated.”
Currently, BGI Contractors provides their employees with health insurance, Fitch said. But he was not sure what the company would do with this new information.
“I’m going have to do some personal research” to see what would benefit both the company and its employees, he said.
As it stands, the Affordable Care Act requires every state to participate in an electronic health care exchange — a website devoted to providing available insurance options. But Texas, Louisiana, Oklahoma and many other states have decided not to use state resources to run the exchange and will allow the federal government to operate it, Bishop said.
“How’s it going to be terrible? It’s a website. It’s not evil,” he said. “It just is what it is.”
The exchange must be up and operational by Jan. 1, 2014, so that people could log online, enter their names and addresses, and be able to locate rates and insurance options available in their areas, Bishop said.
For employers, the act requires them to provide health insurance if they have 50 or more full-time employees, Bishop said. Full-time employees work 30 hours a week or more. If a company only employs on a part-time basis, it would need to add up the hours worked and divide by 30 to determine if the company is required to provide coverage.
If the business employs 50 or more full-time employees but does not want to offer insurance, then it would be required to pay a $2,000-penalty per employee, Bishop said. But the company gets the first 30 employees for free.
Remember: Affordable care is the name of the game.
If an employer offers coverage that is not affordable to an individual — costing more than 9.5 percent of a person’s annual income — then that individual ends up using the exchange to purchase health insurance, and the employer must pay a $3,000-penalty per employee who resorts to the exchange, Bishop said.
The question for employers is two-pronged: What would be the most cost effective — paying the penalties or providing coverage? And what would be the best option for the employees?
“It’s a real dilemma that the employers are going to have to think through this year,” Bishop said.
If employers provide coverage for a single person that costs less than 9.5 percent of a person’s annual income, then neither that person nor that person’s family would be eligible to subsidize through the exchange, Bishop said. And the employer would receive no penalty.
The act determines eligibility on an individual basis and does not consider the most cost effective analysis for families. Even if people get their employer insurance, it may still cost them more if they elect to use that coverage for their spouses and children than if they were to use the exchange, Bishop said.
“We’re going to have to evolve the law,” he said.
The Congressional Budget Office estimated that 158 million Americans acquired insurance through their employers in 2013. Its projection for 2022 was just a million less people: 157 million Americans.
For more information on the options available to employers on insurance coverage, visit http://www.healthcare.gov/using-insurance/employers/index.html.