The Search for Health Insurance Certainty Goes On …

Despite political and ideological differences of opinion about the results of the 2016 elections, with the beginning of 2017 and new, Republican president and GOP-controlled Congress, many employers felt an air of optimism about the future of employer-sponsored health care, and an employer’s compliance responsibility under the Affordable Care Act (ACA).

Instead, we not only end 2017 with EXACTLY the same laws as were on the books for 2016 but possibly even more puzzling, there is even LESS certainty as we head into 2018 and beyond! History will at some point give us the benefit of hindsight to try to explain the long-term effect, but for now all we can do is look at those things which are certain, which are uncertain, and what recommendations we can then make as a result.

What is Certain

The Affordable Care Act is still the “law of the land” for employers who choose to offer health insurance to its employees. Employers with 50 or more employees have even greater compliance responsibilities, or face penalties for not offering qualifying coverage at an “affordable” price. Annual “Form 1094/1095 Reporting” must continue so the IRS knows whether the employer has fulfilled the above obligations, and the IRS is now sending “Letter 226J” notices to employers it believes may be in violation for not providing the coverage they are obligated to provide. Employers also still have an obligation to provide annual notices to employees about their coverage options, or potentially face separate penalties from the Department of Labor. Other compliance responsibilities also remain under ERISA, COBRA, HIPAA, FMLA and a host of other applicable laws.

What is Not Certain

Although it is “certain” that the ACA remains in existence, it is less certain about what that means for employers going forward. Even with the collapse of GOP efforts to repeal/amend the ACA, President Trump still appears committed to changing the way in which the federal government enforces those laws; he has issued an executive order to have the IRS, Labor Department and Department of Health and Human Services consider allowing employers to offer health coverage in other ways, and regulatory efforts are under way as a result. We also know the GOP efforts to pass a tax-reform bill may still have provisions that impact the ACA in some fashion. We just don’t know yet what those changes are or when they will take effect. More important, we don’t have any idea as to what such coverage alternatives would actually cost, though rate increases of 30 percent, even 40 percent, for small employers are not unrealistic. We may also have fewer health insurance provider alternatives based on this ever-changing landscape.

What Employers Can Do

Employers are understandably not happy with the current landscape, where they are still faced with burdensome legal mandates when they provide health insurance to their employees, and with costs that continue to rise. Nonetheless, all is not lost and there are still steps that can be taken to continue offering health insurance coverage to employees without putting the company into bankruptcy:

•  Work with knowledgeable professionals and insurance broker/consultants. Consider a change if your attorney, accountant or insurance broker/ consultant doesn’t meet with you throughout the year to discuss the current status of your health plan, upcoming compliance deadlines, or your three- to five-year strategic plan for providing coverage to your employees.
•  Educate your work force about the cost of health insurance. No matter what legal mandates exist, the only true way to control costs is by managing employee behavior in how they use the health insurance coverage that they already have. Meaningful wellness initiatives are a long-term opportunity, but even just providing a better explanation of an employee’s current health benefits can also be productive. 
• Consider new alternatives to the traditional insurance model. High-deductible health plans, pricing “transparency tools” and tele-health alternatives are all ways to better engage employees in the health care cost-containment process. For employers with at least 50 employees, captives and other “alternative risk” arrangements can allow for greater cost control and flexibility without adding significant liability exposure. “Ancillary” benefits can also be a low-cost option to consider as a supplement.
•  Stay tuned. The only thing truly certain is change. Employers who focus on the recommendations above will be better able to withstand whatever changes that ultimately arise..