Editor’s note: The following information is provided by Dave Hagen, who is a certified insurance counselor specializing in health insurance and who lives in Selah. It is provided in a question/answer format to make it as concise and accessible as possible, and includes answers directly from Hagen as well as from sources he consulted in providing his answers. We welcome readers’ comments and questions about this subject. Please send them to Richard@yvnewspapers.com.  

Q: I own and operate a small business with fewer than 50 employees. Does the new federal law require me to immediately begin to provide health-care insurance for my employees?

A: No, companies with fewer than 50 employees are exempt. Firms with 25 or fewer employees should get a tax credits this year of 35 percent and by 2014 it would reach 50 percent. This may happen possibly via a payroll tax credit but no one seems to be sure how it will work. Like everything else, we don’t know how, we just know we are doing it regardless of consequences. And in 2010 the first business tax kicks in, tanning beds (10 percent tax for indoor tanning services). 

Some wording from Kaiser Foundation that might help: “2010- Provide tax credits to small employers with no more than 25 employees and average annual wages of less than $50,000 that provide health insurance for employees.”
“For tax years 2010 through 2013, provide a tax credit of up to 35 percent of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50 percent of the total premium cost or 50 percent of a benchmark premium. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000.”

Beginning in 2014, firms with more than 50 employees that do not offer coverage will have to pay a fee of up to $2000 per full-time employee if ANY of their workers get government-subsidized insurance, exclusive of the first 30 employees. Personally I see that as a concern for the agriculture industry, as we don’t seem to define full-time, and I have not seen any reference to seasonal employees being exempt in the count. In addition, effective 2014 annual fees totaling $8 billion would be imposed on health insurance companies. Here in Washington State the big three are not-for-profits, and are simply custodians of our dollars, hence that will be passed along by way of premiums.   

Q: As a business owner, are there any provisions in the new law that takes effect immediately that I must comply with?

A: No, most of the big changes will begin in 2014. However small groups that have renewed before April 1 may have a problem in that they did their annual renewals and no one knows what is creditable in 2010 as it’s not defined.  
2010-Employers with no more than 25 employees with average annual wages of $50,000 are eligible for tax credits if they provide health insurance options for their employees.
2011-Employers may be eligible for five-year grants to establish workplace-based wellness programs.

Q: I’m considering changing the health-care plan for my employees. Is there anything in the new federal legislation that I should take into account in making my decision?

A: Not at this time. At some point we are going to have to see what “creditable” health insurance is by definition, but other than preventative care and eligible dependents’ ages, we just don’t know, as an example what deductibles, co-insurance, co-pays are going to be required.

Q: Because of declining revenues I may have to eliminate the health-insurance program for my employees. Will the new federal law provide health insurance for them?

A:  Yes, they would then be eligible for individual coverage. And there will also be the questionable practice of you being list billed for employee’s premiums as part of a health reimbursement account.  

Q: I own a business with more than 250 employees and my company self insures. Will I still be able to self insure now that the federal health-care law is in effect. 

A: Yes, you will still be able to self insure. 

Q: Will the new law affect what I am required to cover in my plan?

A:  Yes, the federal government is set to qualify plans.  But the really big companies that fully retain all risk will be the big winners here, as the government implements a “fee” for health insurance companies, but not for non-insurance companies that retain all risks.

Q: I’m considering expanding my business by buying out a competitor. Are there aspects of the new health-care insurance law that I should pay particular attention to as I make my decision?

A: There are many issues here, and this is where planning pays off. Do you stay in the community-pool class? Do jump in to a risk-assessed group? Should you separate the companies and if so how? 

Envision where you want to be and then bring in your team to help get you there, and make your insurance broker part of that discussion.

Q: How do we fare here in Washington State?

 
A:  Pretty good actually. When we compare similar pools of business, as an example, Seattle rates compared to Boston rates, we look good. 

Our big three non-profits deliver much lower premiums than the government-owned plans in Massachusetts. I suspect if we have a Democratic governor and insurance commissioner, then cross state line exchanges will be allowed and you can expect significant rate increase across all lines from small business to individuals.

One point that is particularly relevant is the impact of the U.S. Department of Health and Human Services on implementation. On many issues, such as “grandfathering,” HHS will need to provide regulatory guidance on implementing the law.  

Until the agency does so on such provisions, health plans and other stakeholders will be operating in an uncertain environment.

Meanwhile, future actions by state legislatures and state regulators are also likely to have a significant impact on implementation.