Naperville-area business people are reacting with a mix of relief and questions about the extended deadline for employers to offer medical coverage to their employees under the Affordable Care Act.
At a Naperville Area Chamber of Commerce legislative committee meeting Monday, financial planners and attorneys said their clients appreciate the extra year before the mandate to provide health insurance takes effect Jan. 1, 2015. But many still are considering restructuring their workforces to get under the regulation's threshold of 50 full-time workers.
Business owners such as Krishna Bansal, president and CEO of Q1 Technologies in Naperville, questioned the layers of regulations and reporting requirements in the law and wondered what benefit employers will see from offering the type of medical coverage soon to be required.
"Will we get a reduced rate from insurance companies? I don't think so," said Bansal, who already offers medical insurance to his staff of more than 50. "Are we going to get any benefit for complying with all of this?"
Chicago-based lawyer Steven Adams posed the question on many of his clients' minds, asking panel members who briefed the committee whether it's legal for businesses to lay off workers or cut hours to avoid the insurance requirement.
"Employers are looking at all kinds of strategies to understand the impact of the law and adapt to it" including layoffs and reducing workers' hours to less than 30, the amount defined as full-time in the law, Adams said. "Legal?"
In short, panelists from the Illinois Chamber of Commerce, the Metropolitan Chicago Healthcare Council and BlueCross and BlueShield of Illinois, said such changes are legal.
Companies with the equivalent of 50 or more employees working more than 30 hours a week can cut both people and hours to avoid offering medical coverage or paying a fine, but Laura Minzer, executive director of the Illinois Chamber of Commerce's Health Care Council, said more considerations, such as workforce morale, should factor in.
Panelist Rick Allegretti with BlueCross and BlueShield of Illinois said employers over the threshold need to consider how their workers will be affected by the individual mandate to get health insurance, the cost of plans offered in the new insurance exchanges and the new tax credits to help some people pay for coverage, all of which are still set to begin in January 2014.
People can receive premium assistance and subsidies if their income is between 100 percent and 400 percent of the federal poverty line and their employer does not offer health coverage at a cost determined to be affordable based on their salary.
Employers may have gained an advantage in determining if it's cost-effective for them to offer insurance because of the one-year delay announced last week.
Allegretti said the prices of the 165 plans to be offered on the Illinois exchange are expected to be released in about a month, giving business leaders time to analyze costs and decide if they will offer insurance or direct employees to find coverage through the exchange.
"The delay helps a lot," said Adams, the Chicago attorney. "It gives businesses a chance to understand how the various options regarding coverage will play out before they would be subject to penalties."