Ignore the shouting, ‘hold tight’ on health plans
The Supremes took their vote on the Patient Protection and Affordable Care Act (Obamacare, if you prefer) March 30. The rest of us — including the apparently endless parade of talking heads and other experts, many self-appointed — aren’t going to know how the vote went until the Court hands down its decision in June.
Whatever the decision — kill the law, keep it, or wipe out just the mandate that requires all of us to either have health insurance or pay a fine — the best approach for employers may be to wait.
The Court’s decision will include an effective date, says Oak Park benefits attorney Larry Grudzien. “People can stop tearing their hair out.”
Assuming for discussion purposes that the Supreme Court makes at least some changes in the health care act, it is insurance companies and providers who will take the next steps. For the most part, employers will have to wait to see what changes happen when.
“My best advice,” says Tim Lavin, “is to hold tight. Insurers are likely to leave everything in place for a period of time, to give everyone a chance to catch their breath.
“Stick close to your broker or agent. For a while, anyway, it will be business as usual.”
Lavin, president of The Lavin Insurance Agency, Schaumburg, suggests for example that “the provision that allows adult children up to the age of 26 to be part of their parents’ health coverage may not change that quickly.”
Although most provisions of the legislation don’t kick in until 2014, there are provisions that are scheduled to become effective this year. Some employers will be required to report the cost of employer-sponsored coverage on 2012 W-2 forms — but only if the business has at least 250 employees.
However, all employers must provide a four-page summary of the company’s benefits and coverage to applicants and enrollees, Grudzien says. There are details, but the purpose of the summary plan — called both the SPD and SBC in industry literature — is to allow employees to compare their options.
“Insurance companies will provide the information,” Grudzien says, “but employers must distribute the data.” There’s a fine of $1,000 per each employee if the employer fails to distribute the information.
The shouting from both sides over the health care act has tended to obscure some small business basics:
Ÿ Businesses with 25 or fewer employees who are paid average annual wages below $50,000 may qualify for a tax credit of up to 35 percent to help offset the cost of insurance. The tax credit is scheduled to rise to 50 percent in 2014.
Ÿ If you have as few as two or as many as 50 employees, insurers cannot deny or cancel coverage based on the health of your employees or dependents.
Ÿ Jim Kendall welcomes comments at JKendall@121MarketingResources.com. © 2012 121 Marketing Resources Inc.