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Possible upcoming employer decisions

Will we take benefits away if we no longer need to comply with the employer mandate?

Did we have to reduce the benefit enrollment waiting period to the new required maximum of 90 days?

Would we want to remove coverage for some of the ACA-mandated benefits?

Would we want to buy health insurance across state lines?

Should we scale back “Cadillac plans” to avoid potential taxation?

Will new California alternatives to the ACA be more attractive?


Debra Davis (debra.davis@ajg.com) is the Western region compliance counsel with Arthur J. Gallagher & Co.’s Benefits and Human Resources division. Current updates are available at www.AJGhealthcarereform.com.


As the new administration in Washington, D.C., settles in, everyone eagerly anticipates revelations about what changes will occur.

Revision of the 2010 Patient Protection and Affordable Care Act, aka Obamacare, has been the subject of much speculation. The Republican Party, which now controls both Congress and the White House, has often promised to repeal the ACA.

Potential changes to this law are of great interest to Northern California employers sponsoring health plans for their employees. So what can we expect — and when?

Change is inevitable, but it will take time. Rising health care costs continue to be a burden, steadily increasing the cost of doing business for companies and taking a toll on the discretionary income of consumers.

So the new administration understands that rather than simply repealing the ACA, they have to make plans to replace it with other reform measures.

Dismantling of the ACA will likely take time, even if Congress passes new legislation that repels the current law and replaces it with a new approach. New provisions could have effective dates at the next insurance policy renewal or, possibly, on a set date after the midterm elections.

Compliance with the in-force laws is required in the meantime. These include the ACA’s employer mandate provisions, the IRS reporting requirements for large employers, and the so-called transitional reinsurance fees.

However, the new administration could still declare a nonenforcement policy for these requirements, thus relieving employers of the obligation to comply.

Employers should take inventory of the changes they’ve made. A number of the ACA provisions have been identified by the GOP as subject to repeal.

For employers, now is the time to decide if they will want to continue offering certain benefits that may be no longer legally required. Many considerations will come into play, including whether savings can be realized, what competitors are doing, and what solutions are available from the insurance companies.

Here are some of the issues that should be on the employers’ decision-making radar:

• If we started offering health care benefits to employee groups working 30 hours or more per week who were not eligible before, such as variable-time employees or seasonal workers, will we take these benefits away if we no longer need to comply with the employer mandate?

• Did we have to reduce the benefit enrollment waiting period to the new required maximum of 90 days? If so, would we consider increasing it again?

• Would we want to remove coverage for some of the ACA-mandated benefits, such as contraceptives? If so, what reaction might we anticipate from employees? Will insurance companies have policies that exclude those benefits and when will they be available?

Looking forward, employers should stay tuned for coming changes. “Fixing” health care remains a stated priority for the new administration, so we might anticipate another potential wave of new provisions, similar to the one ushered in by Obamacare. Issues of note for employers to keep in their sights include:

• Buying health insurance across state lines may become possible, so institutional buyers of health insurance may be looking at a broader selection of options.

• While the “Cadillac” tax provision may be repealed, it is likely to be replaced with another form of penalty on high-value health plans, such as a cap on the tax exclusion for individuals enrolled in such plans. Companies and bargaining groups with rich plans that were in danger of reaching the “Cadillac” threshold should continue to think of ways of scaling them back to avoid potential taxation.

Possible upcoming employer decisions

Will we take benefits away if we no longer need to comply with the employer mandate?

Did we have to reduce the benefit enrollment waiting period to the new required maximum of 90 days?

Would we want to remove coverage for some of the ACA-mandated benefits?

Would we want to buy health insurance across state lines?

Should we scale back “Cadillac plans” to avoid potential taxation?

Will new California alternatives to the ACA be more attractive?


Debra Davis (debra.davis@ajg.com) is the Western region compliance counsel with Arthur J. Gallagher & Co.’s Benefits and Human Resources division. Current updates are available at www.AJGhealthcarereform.com.

• The state of California may look for alternatives if Congress repeals the ACA. Governor Jerry Brown has said that California has “wholeheartedly embraced” the ACA.

California was the first in the country to pass laws to implement the ACA and has millions of Californians enrolled in Medi-Cal and Covered California.

In his recent State of the State Address, Governor Brown indicated that he is committed to protecting the state’s gains on health care, but noted that a loss of federal funds could have a significantly negative impact.

Thus, employers with headquarters — or even secondary locations — in California should stay abreast of what the local legislature decides to do in response to federal actions.

Clearly, many questions about the future of U.S. health care remain to be answered.

For California employers, the coming uncertainty signals the need to tune back into the changes in the health care space, much as they had to do with the initial enactment of the ACA seven years ago. The payoff is the potential to avoid significant pitfalls and take advantage of new opportunities.