With the passage of the Health Care Reform Acts, the health care arena has become a parallel to the movie “The Good, the Bad and the Ugly,” as businesses scramble to figure out what it means for them and for their employees.
As states file lawsuits challenging the constitutionality of the Acts, the atmosphere surrounding it has taken on an Old West feel, with people searching for money to pay for it, manipulating each other and forming strange alliances. In the end of the movie, they find the gold and have a Mexican standoff (paralleling the recent elections), the Bad is killed, the Ugly gets a share of the gold but is left horseless in the desert and the Good rides off with his gold, wounded and unsure of where he is headed.
As in the movie, the Good — available health care for all — has prevailed, but it is (in the least) wounded and its direction unclear. Individuals and business owners are frightened of what the Acts will mean to them and their future.
Since the Acts were passed with hundreds of regulations yet to be written, no one knows how it will affect them. However, we must start now to sort them out and figure out what steps you’ll need to take to comply, says William Sammons, a partner at Nichols, Cauley & Associates.
“The Acts, as passed, have many provisions which will require regulations, explanations or changes in the near future,” says Sammons. “Grandfathered provisions are available for plans that were in effect on March 23, 2010, but there is some near-term shift for companies electing out of a grandfathered plan to adopt conforming plans.”
Smart Business spoke with Sammons about the new Acts and how they will impact your company and your family.
How will businesses be impacted by the Health Care Reform Acts?
Effective 2014, large employers — generally those with 50 or more employees — will be required to provide employees with health insurance benefits or be subject to a nondeductible penalty under a ‘pay or play’ provision. That fee is computed at $2,000 times the number of employees.
In addition, if your health plan offers dependent coverage, your plan must offer this coverage to unmarried dependents up to age 25 (alternatively the plan can opt to extend those benefits through the age of 26). And if a company offers high-cost ‘Cadillac’ plans — costing more than $10,200 for individuals, or $27,500 for families — those plans will be assessed a nondeductible excise tax beginning in 2018.