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posted: 6/3/2013 5:30 AM

Health care rules, small business strategic issues collide

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It's time to focus on what employers must do under the new health care rules -- Obamacare or, more correctly, the Affordable Care Act. "The rules are extremely complicated," says Oak Park attorney and benefits sage Larry Grudzien.

Not only are the rules complicated, but health coverage is beginning to drive business strategies.

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"There are three internal elements -- finance, operations and human resources -- that relate directly to the health coverage issue," says Sharon Harder, president of C3 Advisors LLC, Wheaton.

Finance is on Harder's list thanks to uncertain benefit costs and possible penalties for not complying. Operations matters, she says, because employee head counts impact ACA requirements. HR is a factor "because businesses looking for qualified employees must offer benefits," Harder says.

Among the issues:

• Businesses are required to offer coverage when workforce head counts reach 50, including full-time equivalents. Smaller businesses have options.

• There's a penalty -- technically an excise tax -- for not providing required coverage and another if the coverage provided is deemed not affordable.

• Premiums almost certainly will rise, in part to pay for the cost of covering pre-existing conditions. Some premiums have soared 20 percent and more already this year.

• If your favorite solution is to scuttle coverage and send employees to the Illinois Health Insurance Exchange for lower-cost coverage, you might talk with Grudzien first.

"I'm advising clients to not send employees to the insurance exchange," he says. "There will be 'navigators' there to help individuals find their way, but the navigators can't talk about insurance. They're not licensed."

Tim Lavin suggests that companies with grandfathered plans "may want to hold on" for a bit. Employees in grandfathered plans -- basically, those that existed before ACA and have not changed -- "don't get all the (ACA-mandated) benefits, but premium increases have been lower on such plans," says Lavin, president of The Lavin Insurance Agency, Schaumburg.

"I've seen 30 percent increases" on non-grandfathered plans, Lavin says.

Angela Holten, head of Holten Financial Group Inc., DeKalb, holds out hope that coverage in some situations could be less costly. "Suppose everyone in your group is in their late 50s and 60s -- machine shop workers, for example." It's possible, she says, that exchange-based coverage may be less expensive -- although, she said last month, "We haven't seen rates yet."

Clearly, there are decisions business owners must make. Karen Codere, a Rosemont-based human resources consultant for Insperity Inc., a Houston, TX, company that offers benefit and other HR programs to businesses of all sizes, raises two questions: "What kind of employee do you want to retain? What kind of insurance will you provide" to retain those employees?

Interesting questions.

You may find some answers at the Illinois SBDC at Waubonsee Community College, Aurora, which is hosting a free ACA presentation by Harder June 28. The SBDC at Elgin Community College offers its own free ACA presentation June 25. A Daily Herald-Business Ledger Newsmakers' Forum Thursday (June 6) includes an ACA discussion.

• Jim Kendall welcomes comments at JKendall@121MarketingResources.com 2013 121 Marketing Resources Inc.

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