The Affordable Care Act (ACA) has not only changed the way we think about healthcare in this country, it has also created a multitude of changes for businesses. From new fees and regulations to reporting requirements for compliance, the ACA influences many aspects of business, particularly for small business. Let’s face it – the ACA massively overhauled the healthcare system in one swoop, making it a given that there will be unintended consequences. Frankly, it would be like any organization changing every single process in their company, and then being surprised when unexpected results bubbled up.

There are positives and negatives to the ACA, but the most startling for many companies are the unintended consequences of trying to maintain compliance. For example, we know of several cases where a company wanting to do the right thing for their employees now creates a challenge for those same people. Let’s takes the case of Joe’s Diner (made up for example purposes):

Joe is a good guy so he wanted to pay for a portion of the insurance for his full time employees.  He feels he can give them a benefit without breaking the bank. However, Joe also has several part-time employees who desire to work part-time, but are consistently working around 31 or 32 hours a week. With ACA, these people are now “full-time equivalents” and put his company in a “Large Employer” compliance category; therefore, Joe must cut back their hours since his small business simply cannot afford to provide them with employer subsidized insurance without dramatically increasing menu prices to their customers.  Unfortunately, if he does not take action and continues to let them work unintentionally “full time,” the part-timers will eventually become eligible for his “Affordable” “ACA Compliant” Employer plan or he will face a potential penalty.  The sad thing is that the “Affordable” “ACA Compliant” plan will still be unaffordable to someone in a part time position and make it practically impossible for them (or their families) to receive a subsidy. Wanting to do the right thing would hurt his part-timers' chances of getting insurance via the exchange – an unintended consequence.

Many small businesses simply cannot afford to provide insurance to full-time employees (FTEs) so they are forced to cut hours for their part-time people, meaning everyone takes a hit. Not only do the part-timers have fewer hours, but the businesses may have to add additional part-time people to cover the few hours now cut by their existing team. Adding people may seem like a good thing on the surface, but we are all aware that it is an expense to recruit, hire and train a new employee, even if they are part-time.

This is one of the scenarios highlighted in the most recent Congressional Budget Office (CBO) report which has created a bit of media buzz regarding the actual intended results of ACA.

The CBO Highlights Consequences

The most recent report from the nonpartisan CBO outlines how the ACA will bring a drop in work hours equal to the loss of 2.5 million full-time workers over the next decade.  The report reflects that the majority of these workers are in the blue collar and low income sectors, the very group that the ACA is ideally structured to assist.

According to Democratic spokespersons such as Nancy Pelosi, the numbers are overstated and the idea from the beginning was to get people out of “job lock” so they do not have to stay in no-where jobs for insurance. But is that really what will happen?

The industries that will be hardest hit are those with lower margins, such as retail, construction and manufacturing. These industries are already operating with slim margins and for those small businesses, it is typically not feasible to raise rates in order to absorb a major expense. Typically they are looking for ways to minimize cost and streamline in order to remain competitive, or even to remain in business.

What we actually are seeing is those companies least impacted are already doing well in their competitive but growing markets. This includes industries like healthcare and technology. Most are already in compliance and providing good benefits primarily because they have to compete for talent. In this scenario, attracting the best talent requires higher end benefits packages, meaning ACA has no impact other than more compliance hurdles.

Consequences for Small Business

For all businesses, it’s really about margins, and ACA gives a bigger hit to companies that can afford it the least. Companies in higher margin businesses are prepared for ACA because they have other industry drivers that compel them to provide good benefits. Those in lower margin businesses use part-time talent as a way to remain competitive and are the hardest hit. The unintended consequence is having legitimate honest business owners feeling slighted in the equation. Or having small businesses pass on the charge to consumers in order to stay competitive as in the case of many Florida restaurants that are passing on a 1% ACA surcharge to their patrons.

Frankly, the way the ACA has panned out for many small businesses in blue collar industries is that it has been more of a disincentive to grow. These businesses are practically penalized for attempting to become more organized, more professional, all due to growing concerns that the cost of providing employee benefits will become cost prohibitive.

Of course, there are more unintended consequences, such as the latest trend of large healthcare conglomerations gobbling up smaller clinics (which we will cover in a future post), and we are certain we have just scratched the surface on the challenges that will bubble up from the implementation of ACA. Fortunately, you do not have to figure these out on your own. Our group health benefits specialists are well-versed in the nuances of ACA and are happy to answer your questions and address your concerns. Don’t let unintended consequences sideline your business. Ensure you are up to speed on ACA as it impacts your business by giving us a call today.

Miran Diran, a budding copywriter for a large Indonesian ad agency, slips into a coma and dies after working 30 hours straight. Moritz Erhardt, a German intern for Bank of America, died of a seizure believed to be caused by a 72-hour work binge. Both these young people worked beyond their limits, or frankly reasonable human limits, to complete the tasks given them in order to move ahead or to be considered for future positions. There are industries where this practice is common – treat junior associates and interns without much care. In fact, it’s so prevalent in the banking industry that entire practices have come under scrutiny after Erhardt’s death last fall. But is it only limited to these industries?

It might seem these are one offs; unusual circumstances due to overzealous young people putting themselves at risk. Unfortunately, it seems there is a bigger issue at hand – binge working. This involves working unreasonable hours fueled by energy drinks and technology that allow a person to push themselves beyond reasonable limits. And this trend is costing businesses both in long-term productivity and absenteeism.

According to a survey published in the American Journal of Epidemiology, overwork is associated with the following:

• Cardiovascular and immunologic reactions
• Reduced sleep duration
• Unhealthy lifestyle that contributes to:
  • Cardiovascular disease
  • Diabetes
  • Fatigue
  • Depression

Furthermore, there is evidence that suggests working for years under these stressful conditions may lead to dementia.

Unfortunately, there are many organizations that reward binge working, believing that it is the employee sacrifice rather than the level of productivity that is important. After all, someone working longer hours must be getting more done, right?

Not true! In fact, working long hours with minimal sleep, poor diet and a steady stream of highly caffeinated drinks will negatively impact productivity and increase the number and degree of mistakes that are made.

Break the Binge with Balance

Creating a positive work environment starts at the top, and while there are times that require “all hands on deck,” the day-to-day rhythm of a workplace should be one that is positive and engaging. If your organization is one that requires long hours, make sure that is stated up front, but that there are also checks and balances to ensure that the quality of output is there, not just a lot of people hanging around the office to “put in their time.”

The following ideas will help your organization devise a good plan to ensure your team generates high levels of quality and productivity, not just long hours:

• Reward Performance – this means rewarding for quality of work and productivity, not simply burning the midnight oil. Devise performance plans that are appropriate for each department or division – a one-size-fits-all will not work for every group.
• Develop Prioritization Skills – ensure your leaders and team members are solid in prioritizing and adjusting calendars to meet those top priorities.
• Consider Wellness Programs – keeping employees healthy will go a long way to improving productivity without having them gulp down large quantities of energy drinks. Have seminars with nutritionists, or find creative ways to provide wellness tips. Our group health benefits specialists can provide ideas on wellness programs that fit your needs and your budget.
• Improve Communication – by ensuring there are open lines of communication, your teams will not only get better information to complete projects and tasks, but spend less time redoing because of miscommunication.

Everyone is busy, trying to do more with less. However, staying focused on core competencies and ensuring employees are well-versed in the most important goals will keep everyone on track. It is important to build in balance so that your corporate culture remains positive, and there are no tragic outcomes like Miran or Moritz.

One way to ensure your organization stays on tasks is to consider outsourcing non-core competencies such as benefits, payroll and human resources administration. The laws surrounding these areas are constantly changing, so choosing to partner with a Professional Employer Organization (PEO) can ensure you stay in compliance and stay focused on your core business. Feel free to give our insurance specialists a call to learn more about PEOs, and keep those energy drinks down to a minimum!

A New Year means new goals and resolutions, with health and fitness often at the top of the list. After all, who wouldn’t like to have that extra boost of energy, confidence and a rockin’ body? Changing your attitude and approach to a healthy lifestyle might just make 2014 the year you actually see results, and keep them. After all, it’s a good idea to make health a priority so you can avoid costly doctor bills and avoid any out-of-pocket expenses on your healthcare insurance.

Technology is making it easier than ever before to reach fitness goals. As they say, there’s an app for that! From apps that communicate with tennis shoes and fitness watches to calorie trackers, we can expect to see a continued upswing in health technology. These advances will not only help improve our health – they will make fitness more convenient and affordable.

Individualized Fitness Plans, Thanks to Technology

Let’s face it; talking yourself into going to work out can take some doing. Plus, it takes time out of your already busy life. Living in a society where time is limited and convenience is crucial, working out on your own schedule increases the chances of meeting goals. Fitness training, as opposed to some team sports, can be performed in an extremely flexible way – 7 days a week, often 24 hours a day, whenever you have time. In fact, many gyms now provide 24-hour access for those who have unusual schedules or just need to work out at midnight.

To that end, many gyms are now looking at ways to incorporate smart device apps into their own programs. Doing so not only gives their customers a way to work out at the gym, but also supplement while they are away.

Smart device apps and personal technology already offer some of the same services available in the past only through a personal trainer, including customized workout plans that evolve as your performance improves. Because working out has shifted to a more individualistic approach, personal trainers are expected to play a different but important role going forward. They will develop more programs and perhaps even help customize apps for clients, ensuring that the work-out approach is more individualized and better for the customer.

The Future of Health and Wellness

In the fitness and wellness sector, just as in the rest of our society, technology is reshaping the market and opening up new possibilities. Web-based and customized training, individual training plan management and analysis – retrievable anywhere, anytime – are hot in fitness. The same goes for counting calories, staying on good eating plans and even buying your groceries.

Technology simplifies our lives, allowing us to individualize our fitness goals and wellness plans. It’s never been easier to stay on track!

With the continuing changes in healthcare, it’s even more important to take care of yourself so you can avoid costly doctor bills. Plus, you want to keep your kiddos in school, and you and your spouse at work, so take a few minutes and find your favorite app to help you stay healthy in 2014!

Recently we added a form to our blog so that you can ask your most important individual insurance questions regarding the Affordable Care Act, or frankly any healthcare insurance question you may have. We know during times of great change, it is important to reach out to anexperienced health insurance broker in order to receive good advice.  We are pleased to provide answers to many of those questions today. Let’s get started!

Will hospitals and/or providers accept the plan?

The Individual Insurance Exchange is just like any other insurance plan in that it has a network of doctors and hospitals that will accept the insurance. The levels will provide different access, again like many other insurance plans we have seen. Think of it this way – if you purchase an automobile, then you expect to receive more amenities and upgrades the more you pay. This is a simple analogy, but it is somewhat the same with the individual insurance exchange plans.

The best advice we can give is to check with local physicians and hospitals. If you already have physicians you see, ask them if they intend to participate in the Exchange. Contact your local hospitals to find out the same. If you do not already have doctors, then at a minimum contact your local hospitals to ensure they will accept the Exchange plans.

Will I qualify for subsidy?

The short answer is it depends. There are specific calculations to determine if you qualify for a subsidy and if so, how much. The basic calculation is as follows:

If your employer does not have a plan that meets the minimum value standard, meaning it pays, on average, less than 60% of the overall cost of essential health benefits to plan members OR does not meet government standards for an affordable plan (9.5% of your W-2 pay), then you can use the following as a guide to determine if you can get assistance:

• Income is less than $45,960 as an individual.
• Income is less than $94,200 for a family of four.

AND

• Your Employer does not have a plan that meets the minimum value standard, meaning on average, it pays less than 60% of the overall cost of essential health benefits. If this is the case, then plan value is below the lowest level of plans, called Bronze.

OR

• The employer’s plan does not meet the government’s affordability standard, meaning employee-only coverage is more than 9.5% of your W-2 income.

To be eligible for a subsidy, you must be enrolled at a minimum in the second-to-lowest cost Silver plan.  The amount of the subsidy will be dependent on your household income and the region of the country in which you live.

There is a great calculator on the Kaiser Family Foundation website that can assist you with your specific situation. You simply fill in the form and it will tell you if you are qualified and if so, an estimate based on your specific details.

Why are the rates so high?

Rates are based on a number of factors, such as geography. It is also important to remember that the carriers are now assuming a higher risk. In the past, carriers were able to ask questions regarding medical history in order to ascertain the most appropriate plan for that person and the carrier.

Unfortunately, without that information carriers have to assume the worst case scenario for everyone, resulting in rate increases across the board.

Should I stay grandfathered?

If you have an individual healthcare plan that is grandfathered and can stay with it, then we would recommend doing so. However, there are certain scenarios that may warrant a look at the Individual Exchanges. For example, in 2014 pre-existing conditions can no longer be considered. If you have a plan that has a rider on the policy for a pre-existing condition, it’s probably worth your time to take a look at the Exchange or other individual healthcare policies to see what is now available.

Grandfathered plans will remain in effect until 2018, at which time everyone will be required to evaluate their plans and select new ones. In the meantime, if your plan works well and provides the coverage need, we recommend keeping it.

How do I get onto the Exchange if the website does not work?

If you have done your due diligence, including speaking to one of our experienced health insurance specialists,then feel free to contact our office to receive a paper application.

The reality is that the Individual Insurance Exchange plans should be analyzed the same as any individual healthcare plan. Make sure to ask questions and ensure that your doctors are going to accept the plans. As always, we are here for you so feel free to either submit your question via our form here on the blog or give us a call.