Employers are asking two main questions about health reform: What do I have to do? and When do I have to do it? But these are the wrong questions.
Instead, employers should be asking: Why am I offering employees healthcare benefits?
They should then use their responses to shape their companies’ healthcare reform compliance efforts and their overarching organizational benefits strategy.
Where to go from here
That’s the message Gary Kushner delivered at the 2014 Society for Human Resource Management Conference in Orlando, FL.
In his presentation, Kushner outlined the things employers should be considering when it comes to Affordable Care Act (ACA) compliance:
1. The recruiting implications of offering/not offering a plan.
As employers analyze the financial impact of continuing to offer healthcare benefits, they also need to keep in mind how these benefits impact their recruiting and retention processes.
Firms that drop healthcare coverage when the “play-or-pay” penalties kick in will likely have to offer something else to compete with firms in their industry that continue to offer coverage.
Some employers planning to drop coverage will likely pass along some of the premium savings directly to their employees, and Kushner agrees with that strategy, saying firms that are planning on dropping coverage will likely have to offer some extra cash if they want to stay competitive.
2. If you should care about grandfathered status.
Plenty of firms are struggling to find ways to retain their grandfathered status.
But it may no longer be with it if it means giving up the flexibility needed to keep healthcare costs from skyrocketing.
3. The penalties for failing to offer coverage or offering “unaffordable” coverage.
Now’s the time for employers to start analyzing how much penalties will cost compared to total coverage costs.
It’s a good idea for companies to do this before deciding how to keep their healthcare plans compliant with the ACA.
With these specific numbers, it’ll be easier for execs to make decisions about the company’s future healthcare strategy.
4. The Cadillac tax.
Any coverage that exceeds $10,200 for employee-only or $27,500 for family coverage will trigger this tax, beginning in 2018.
But employers should look at their healthcare trends now to see if they’re likely to hit this threshold and determine if changes are needed to avoid the tax.
The sooner firms start estimating whether they’ll be subject to this, the easier it’ll be to come up with a sound compliance strategy.
Adapted from: “Ready Set Go! Preparing Your Organization Now for Health Care Reform,” by Gary Kushner a presentation at the 2014 Society for Human Resource Management Conference & Expo in Orlando, FL.
Info: A previous version of this article appeared on our sister website HR Benefits Alert.