Many of the provisions of the new health care bill don’t take effect right away, but there are some compliance issues that business owners need to act on now. If you currently offer a health insurance plan, there are steps you need to take now to ensure that you can maintain that plan, says former U.S. Congresswoman Nancy L. Johnson, a senior public policy advisor with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC.
“In 2010, you will have to make sure your plan covers employees’ adult children up to age 26,” Johnson says. “You also have to make sure, with individual and group health plans, that your plan conforms with the new requirements in regard to lifetime limits and exclusion for pre-existing conditions.”
Smart Business spoke with Johnson about what you need to know to be in compliance with the new health care law and how to make sure your voice is heard when the administration is writing the rules to go with it.
What do business leaders need to do in the short term to comply with the new health care law?
Start by being aware of the new law and asking how you need to change your plan. Some companies won’t need to change much at all. But others will, as they will not be allowed to exclude children for pre-existing conditions and their plan will not be allowed to drop people. In addition, group health plans and individual plans will have to provide access to preventive services with no or very minimum cost sharing.
Those things, along with having to cover employees’ adult children up to age 26 and elimination of lifetime limits, will most likely result in increased costs in a business’s health plan as it meets the immediate requirements of the bill. If medical costs keep rising at the historic pace and the new health care requirements increase costs instead of decreasing them, there is going to be a lot of rethinking. That is one of the biggest dangers posed by the new law, that it might undermine the employer health benefit structure, making employers more likely to drop their plans and let their employees go into the state exchange with few tools to control costs.
Are there subsidies to encourage businesses to offer health insurance to their employees?
There is a program for early retirees who retired after age 55 and who are not eligible for Medicare. It is effective this year and available to employers who provide coverage for such early retirees because this coverage is very expensive. Under the new law, employers can get help through the new subsidy.
In addition, if a company is a small business, with fewer than 25 employees with an average annual wage of less than $50,000, it will be eligible for a tax credit to buy a plan or to apply to a plan that it is already providing.
In 2014, the amount of the credit increases to up to 50 percent of an employer’s contribution and remains available for two years. The subsidy may not encourage businesses to offer insurance because it is modest and time-limited.
