Some Businesses Wait on Health Law
The health care overhaul has passed all court tests and is taking effect on schedule. Photo by Nathan Bernier/KUT NewsAudio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Yesterday’s vote by the U.S. House of Representatives to repeal President Obama’s health care overhaul is unlikely to go anywhere with the U.S. Senate controlled by Democrats. But that political equation could change after November, and some employers are waiting to see what happens.
GOP presidential candidate Mitt Romney vows to repeal and replace the health care law, and that’s exactly what the conservative National Federation of Independent Business would like to see.
“What we’re telling employers is just keep the faith,” said Will Newton, head of the NFIB’s Texas chapter. “We’ll keep battling in all the Congress to get this repealed and replaced, but in the meantime talk to your health insurance professional and run the numbers.”
But with the Supreme Court’s decision on the health care law only two weeks old, it appears many companies haven’t started getting ready for the next round of provisions slated to take effect.
“My take on it is that most firms haven’t even begun to start addressing that,” said Eddie Carter with the Austin insurance agency Carter’s Benefits.
A survey of companies by the insurance consulting firm Mercer found that one in 6 planned to wait until after the November election to develop a strategy to respond to provisions in the Affordable Care Act. That might not be the best idea, according to Mercer consultant Tracy Watts.
“If you are a company that has a lot of hourly workers that you don’t currently provide benefits to, and all of a sudden you’re going to have to in 2014, you might want to have a plan in place going into 2013 for how you’re going to do that,” Watts said.
Here are some things employers do need to worry about before 2014: Starting this fall, most companies will have to start providing workers with a standardized, four-page summary of their benefits so employees can compare them with other plans. Companies with more than 250 employees will have to report the value of health insurance plans on W-2 forms for the 2012 calendar year. In the open enrollment period next year, health insurance exchanges will help small employers shop for private health care plans.
“I think it’s a lot to keep track of and to know what you’re supposed to do when,” Watts said.
A big deadline comes in 2014. That’s when companies with more than 50 employees have to start providing a minimum level of health insurance, or pay a penalty of about $2,000 a year per employee. The fine goes up each year as the cost of health insurance rises.
Bill Hammond with the Texas Association of Business says some employers may see that fine as more affordable than providing coverage.
“I think the effect would be that you see that many employers would simply drop their health insurance,” Hammond said.
And Ronnie Volkening with the Texas Retailers Association says a lot of companies are still trying to do the math.
“Those employers are at this point just dismayed and throwing up their arms and wondering what it is they’re going to have to do and hoping that there’s some clear guidance to lead them through the maze,” Volkening said.
The Texas Retailers Association and other business groups are developing guidance for their members, but many small, independent companies don’t belong to larger associations.
Local chambers of commerce can also be a source of information. The Austin Chamber of Commerce is hosting an expert panel later this month on the effect of the health care law on local businesses.
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