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VOL. 7 | NO. 14 | Saturday, March 29, 2014

Employers, Workers Navigate Compliance Rules

By Don Wade

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As a certified health care reform specialist, Tim Finnell can stand back and from a distance say the Affordable Care Act does not really have a beginning and an end.

“There will never be final rules,” said Finnell, the president and founder of Group Benefits LLC. “Everything’s going to keep changing.”

Finnell works with employers who are trying to navigate a web of regulations that, at times, almost seem to be their own life forms.

“People are trying to understand compliance,” Finnell said.

And also what it means to their bottom line.


“For employers, an increase in health care costs is one of the first things on their mind,” said Mitch Graves, president and CEO of Health Choice LLC, a physician hospital organization that is a joint venture between Methodist Le Bonheur Healthcare and MetroCare.

Graves says the “education of the consumer has been difficult,” but so, too, for employers.

“Complying with the (Affordable Care Act) is a complex task for many employers,” J.D. Piro, head of the health and benefits practice at AON Hewitt, a large employee benefits consulting and outsourcing firm, told Forbes.com. “The decision to phase in the coverage requirement is a welcome development that will give organizations more time to implement these changes effectively and without having to incur penalties.”

So, in 2014, companies with fewer than 50 workers, which is more than 90 percent of employers, do not have to provide health insurance or fill out any forms.

Employers with 50 to 99 workers not yet providing what is deemed as quality and affordable health insurance – as defined by regulations – will now have until 2016 to comply.

Large employers, those with 100 or more workers, have until 2015 to comply, but the vast majority of these companies already provide coverage.

“Some employers (generally smaller employers) with thin margins, struggling to get by – we’re seeing some of those companies (opt for the cheaper health care plan),” Finnell said. “But most companies are still trying to offer coverage that will attract and keep valuable employees and protect employees and their families.”

Which sounds simple enough. But, as Finnell explains, the Affordable Care Act is never simple.

“It’s just play or pay,” he said, referring to the penalties that will come to companies found in violation of the law.

And companies fear being found in violation for several reason. First, because the law is complicated, they might be in violation without knowing it. Second, there is a mountain of paperwork involved, and if employees don’t fill out the forms they are supposed to fill out, that can come back on the company.

“Many employees might disregard these forms,” Finnell said, “but you have to have to show you have a system for distributing the forms.”

The biggest fear, of course, is the penalties that can cost $100 per employee, per violation, per day.

“That adds up quickly,” Finnell said. “Nobody expects that it will be imposed for oversights for hundreds of thousands of dollars. But I think intent will be part of it. So employers are very concerned about that.”

Meantime, from the health provider side, things are changing, too.

“Medicare drives the market,” said Teresa Waters, professor of preventive medicine and a health economist at the University of Tennessee Health Science Center. “As goes Medicare, so goes the rest of the market. So what Medicare is doing is driving payment innovation. They are actively seeking to reorganize the way care is delivered and reorganize the way care is paid for.

“So, for example,” Waters said, “they are driving something called accountable care organizations. And other payers are exploring these as well. This is one of the reasons that’s driving all these hospitals to buy up practices – because they want to become accountable care organizations.”

In January, the Centers for Medicare and Medicaid Service reported, according to The New York Times, that half of the 114 physician groups and hospitals that started accountable care organizations in 2012 slowed Medicare spending in the first year. But fewer than 30 of them managed to save enough money to qualify for the sought-after bonus payments.

The 29 that did divided a reported $126 million in savings while generating another $128 million in net savings for the Medicare Trust Fund. More than 50 other ACOs slowed Medicare costs, just not enough to receive the bonus payments.

“Other payers (not just Medicare) are doing demonstration projects in that area as well,” Waters said.

Finnell’s hope is that all these aspects can work together to improve health care and lower costs for both employer and employee.

In the commercial sector, he said, “It’s the old cafeteria model on steroids. There are ways for the employer to control costs by having defined contribution plans. The employee gets one bucket for health care, another bucket for dental and vision, and the employee can choose what’s right for him.”

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