John Gause has grown the size of his benefits brokerage and consulting firm by more than half this year for one big reason: health care reform.
Gause’s Indianapolis firm, Apex Benefits Group Inc., has hired seven employees this year, growing its payroll to 20, in addition to regular use of outside consultants.
Apex needs more hands on deck because its employers are facing a raft of new regulations with which they must comply. At the same time, Apex has lured several large clients to its fold, seeking help on compliance and wellness initiatives meant to contain their health benefits costs.
“Health care reform, it’s going to be a compliance tsunami,” said Gause, reclining in a chair at the end of a conference table in his office, which sits across the street from the Fashion Mall at Keystone Crossing. Apex doubled the square footage it’s renting this year in order to house the new staff.
Even before President Obama signed the Patient Protection and Affordable Care Act in March, business at professional firms of all types was heating up as their health care and employer clients sought counsel on charting a strategic course through the new reality and knowing how to comply with the new rules.
And that’s only going to increase as federal bureaucrats flesh out the 2,500-page law, adding tens of thousands of pages of rules and regulations, predicted Bill Thompson, managing partner of Hall Render Killian Health & Lyman PC, an Indianapolis law firm serving doctors and hospitals.
“It is a testament to the complexity of the health care industry and the need by hospitals, health care systems and doctors for the expertise necessary for them to successfully navigate the murky waters of health reform,” Thompson said.
Hall Render has hired 15 attorneys and 12 support people this year at its offices in Indiana, Michigan, Wisconsin and Kentucky. Eleven of those hires have been in Indiana.
Consultants from all over the country are pitching solutions to the uncertainty caused by the new legislation and rule-writing process, said Tom Fischer, chief financial officer at Community Health Network. For example, hospitals and doctors are madly trying to merge into the “accountable care organizations” called for in the law—even though the definition of such organizations has yet to be spelled out by the federal government.
“It was basically the Consultant Full Employment Act,” Fischer said of the health reform law.
Linda Heitzman, a director at Deloitte Consulting and frequent adviser to pharmaceutical and life sciences companies, agreed.
“This is actually a great time to be in the health care and the life sciences consulting business,” she said Sept. 10 during IBJ ’s Health Care & Benefits Power Breakfast. “And we are committed to helping our clients navigate all of the turmoil and the opportunity that is presented by the legislation.”
The health reform law will affect different parts of the health care industry quite differently as its provisions phase in over the next eight years.
Health insurers will be required to accept all comers, no matter how sick, and will not be able to put a cap on a person’s lifetime amount of medical bills that will be covered. In addition, the law limits health insurers on how much more they can charge a sicker or older person versus a younger or healthier one.
Through various taxes, the law will fund subsidies for low- and moderate-income families to buy private health insurance if they do not have access to health insurance through an employer.
The law imposes taxes on makers of drugs and medical devices, as well as on health insurers. It also includes funding for studies that compare the effectiveness of these products—and other health care procedures—against one another.
The various elements of the bill are expected—by consultants, who else?—to create an environment of extreme price pressures on all parts of the health care industry.
Some of the biggest changes fall on employers. That’s where Gause and Apex Benefits come in.
Apex launched a software tool this year it calls Compliance Dashboard, which sends automatic e-mail reminders to clients in the days leading up to a deadline for them to file a document with a governmental authority.
The software also allows numerous managers at an employer to see whether the company has submitted the required documents. So far, 35 of Apex’s 105 clients are using the tool.
The health law creates some new requirements for employers. For example, every company must report the value of the health care benefits they provide on the W-2 forms they produce for each employee.
Further, employers must report to the federal government that they are, indeed, providing health benefits to employees. Otherwise, the company must pay fines, and the employees will be eligible to buy health insurance through the state-based exchanges that will begin in 2014.
And all employers must prepare a tax form for any vendor with which they do more than $600 of business in a year.
Gause also expects some existing penalties to rise in importance. For example, every employer with at least 100 workers already is required to submit a Form 5500 to the U.S. Department of Labor for every health care and Worker’s Compensation plan they have.
If they don’t and a federal audit catches them, the penalty is $1,100 per beneficiary per day.
“Historically, there’s not been a lot of audits,” Gause said. “But guess what? The government’s looking for money.”
Apex handles $200 million a year in insurance premiums. Its business has grown 30 percent this year, and Gause expects another 30-percent growth next year.
And with new clients like Monarch Beverage Co., Steak n Shake and Purdue University, Apex is sure to be hiring even more.
“We’re going to continue to look for good talent,” he said. “We’re in a position to pull the trigger.”•