The full rollout of Obamacare on Jan. 1 will force some employers to make key decisions this year, but on the whole, the year will be anticlimactic, as most employers hold steady to watch the law’s changes play out after 2014.
That’s the view of some Indianapolis-area benefits brokers and attorneys who are helping employers crunch the numbers on how the 2010 Patient Protection & Affordable Care Act will affect them.
There are simply too many factors that are unknown about the impact of the law for most employers to see clearly the best path forward, said Chris Sears, an employee benefits attorney at Ice Miller LLP.
“In terms of making big, grand design changes, I get a real hesitance among employers to make those kinds of decisions this year,” Sears said. He said employers will do what they have to do to avoid paying Obamacare’s new fines for employers that don’t offer affordable health care coverage. Other than that, he added, “I don’t see many employers making radical changes this year.”
Katy Stowers, adviser and general counsel at First Person Inc., an Indianapolis-based benefits consultancy, agreed.
“It probably will be pretty anticlimactic in terms of wholesale change,” Stowers said. “Eventually, they’re all going to say, No, I’m going to wait.”
Key information has been slow in coming about the health reform law, and some elements have simply been delayed. For example, in March, the U.S. Department of Health & Human Services said it would delay until 2015 a plan to allow employees to pick their own health plans in federally run Small Business Health Option Program exchanges, known as SHOP exchanges.
Small businesses can still use the exchanges to help their workers obtain health coverage, but the workers will only be able to choose the health plan the employer picks for them.
Another big point of uncertainty is how a raft of changes to the small business and individual health insurance markets will affect the premiums charged by health insurers.
The health reform law limits how much more insurers can charge an older customer versus a younger one for individuals buying insurance on their own and for businesses with fewer than 50 workers. Actuaries say the likely result will be rates rising for younger and male customers and falling for older and female customers.
For a company like Leaf Software Solutions, whose workers are 80-percent male, with an average age of 37, those changes likely mean its health insurance rates will rise next year.
But Leaf doesn’t expect to get 2014 rate information from its insurer, Anthem Blue Cross and Blue Shield, until August. Any changes it wants to make would then have to be done by about Oct. 1, so it could start enrolling its workers in its health plan for 2014.
That just doesn’t leave enough time for making major changes, said Eric Young, Leaf’s director of finance and administration.
“Small companies, medium companies, it’s unfortunate that we are going to have to wait for so long and have so little time to react,” Young said. “Health care reform in general has been a whole lot of questions with not a lot of answers.”
Leaf has 49 employees, and if that number grows to be more than 50, Leaf would not be affected by the new rules governing small businesses and individuals. Rather, its rates would depend solely on the history of medical claims incurred by Leaf’s workers and their families.
But it’s not entirely clear to Leaf if it must have more than 50 employees already or just by the end of the year. Typically, health insurers did not consider a company to have more than 50 workers until its work force averaged that size over a 12-month period.
Also, Leaf is working with its broker, First Person, to evaluate whether it should change its health plan to what is known as modified self-funding. Under such an arrangement, a company insures itself against medical claims up to a certain threshold. For costs that go above that level, the company pays premiums to a stop-loss insurer.
“It’s just wait and see,” Young said.
But the health reform law will have an impact, said Sears, the employee benefits attorney. Five years from now, Sears said, the health insurance exchanges, employer penalties and the individual mandate that requires nearly all Americans to obtain health insurance will likely drive radical changes in employer health plans.