Confused about ACA? So are the Insurance Experts
By Don Jergler For Veterinary Practice News
Posted: December 3, 2013, 12:40 p.m. EDT
When it comes to the Affordable Care Act, widely known as Obamacare, there has been a lot of confusion of late. But there are some options that small businesses, such as veterinary practices, can explore.
Gary Glassman, a CPA who works for Burzenski & Co. in East Haven, Conn., advises veterinary clinics and hospitals to look carefully at health plan options and try and find benefits among the sweeping changes being ushered in by the Patient Protection and Affordable Care Act.
"Hospitals with under 50 employees have lots of options,” Glassman said. "The issue is the uncertainty related to the cost. Unfortunately, no one at this point knows how this will turn out, so employers can continue to do what they have done in the past and continue to provide health coverage with coverage purchased through their past carriers, or they can buy employer-provided coverage through the employer-provided exchanges.”
He also encouraged employers who want to receive tax credits for health insurance coverage to continue providing coverage or those credits will lapse.
With the delay in the large-employer mandate to provide employees healthcare, there is a lot of confusion about who needs to do what and when to comply with the Affordable Care Act.
Small businesses are exempt from this mandate, but they must still send out notifications to employees and they can still take advantages of some of the options offered by ACA throughout the year.
Here are some dates to be aware of.
* For the individual market, veterinarians must sign up for a 2014 plan by Dec. 15 in order to have coverage effective on Jan. 1.
* Large businesses (those with more than 50 employees) now have until March 31 to sign up. The deadline extended only for the penalty portion of the individual mandate (for large businesses) regarding when a penalty will be imposed if a large company doesn’t have coverage in 2014. However, the Dec. 15 date above still applies if coverage is needed on Jan 1.
The deadline for businesses to notify employees of the exchanges was Oct. 1, but that can still be done. Employers can get sample documents available on the U.S. Department of Health and Human Services website (www.HHS.gov) or the U.S. Small Business Administration’s site (www.sba.gov).
"For those that have received small-employer tax credits for health insurance coverage, the only way to continue to get those credits is by purchasing coverage through the state exchanges,” he said.
Veterinarians may qualify for the Small Business Health Care Tax Credit, said Libby Wallace, CEO of the American Veterinary Medical Association Group Health and Life Insurance Trust (AVMA GHLIT).
"This depends on the number of full-time-equivalent employees, the total annual average wages paid and whether the employer pays for at least 50 percent of the employee premium costs,” Wallace said.
Small businesses are eligible for a health-care tax credit if they have fewer than 25 full-time-equivalent employees for the tax year, pay employees less than $50,000 per year on average and contribute at least 50 percent toward their employees’ premium costs.
Small businesses can earn tax credits for up to 50 percent off premiums paid starting in 2014.
Another option: Small businesses can keep the coverage they have now, or those with 50 or fewer full-time employees can take part in the Small Business Health Options Program (SHOP), open to those classified as small businesses.
According to ACA promotional materials, SHOP benefits business with:
* Encouraging employee loyalty—it helps recruit and retain the best talent
* Increased productivity and reduced absenteeism
* Financial control that enables businesses to select the level of coverage to offer employees
* Tax advantages
* Simple billing
Businesses that plan to use SHOP must offer coverage to all their full-time employees–generally those who work 30-plus hours per week on average–and in many states, at least 70 percent of full time employees must enroll in the SHOP plan.
Anne Gonzales, a public information officer for Covered California, the nation’s largest health-insurance exchange, said a lot of the confusion out there is due to the large-business mandate to provide employees health care; this affects businesses with more than 50 employees.
There is no such mandate for small businesses, she noted.
"There’s never going to be a small-business mandate,” she said. "There’s only a large-employer mandate, and that will kick in in 2015.”
For now, businesses with between 50 and 100 employees cannot take part in the SHOP program, but the plan is to expand the program to include businesses that employ up to 100 in 2015.
Businesses with questions about SHOP can call 877-453-9198 for answers and simple advice.
Big businesses should stay tuned for an open-enrollment period sometime in the near future, advisers say.
While the implementation of the large-employer mandate is a major part of ACA and it has been delayed, it’s important to remember that several changes are still set to take effect, according to AVMA GHLIT’s Wallace, who emphasized, "There are still several aspects of the Affordable Care Act that will impact employers effective January 2014.”
For all businesses, one important date has passed.
"The most pressing [was] the notification to employees of the exchanges,” Wallace said. "This notification was supposed to have been distributed to employees by Oct. 1.”
Veterinary clinics that have not already provided employees with these notifications can get sample documents available on the U.S. Department of Health and Human Services website (www.HHS.gov) or the U.S. Small Business Administration’s site (www.sba.gov).
Wallace offered tips to help veterinarians deal with the exchanges.
* Review plan choices and rates in your area with an insurance professional, such as a broker or agent;
* Consult a tax adviser regarding the implications of offering an employee medical plan or paying the tax penalty if you don’t offer a health plan;
* Visit SBA’s website (www.sba.gov) and sign up for alerts and webinars, which will enable practice managers to obtain up-to-date information on changes relative to employer coverage.
Her most urgent tip was to start taking action now, whether that’s educating yourself if you’re a practice manager, or considering an early renewal of your employee medical plan.
"By renewing an employee medical plan prior to Jan. 1, employers may benefit from lower premium rates throughout 2014,” Wallace said. "Your agent or broker will be able to give employers the best advice regarding all renewals.”
Bob Evans, an insurance agent who runs Evans Financial Services with his son Travis Evans in Conversation, Texas, said the confusion created by ACA is occurring even among experts like him.
"There’s so much that is still unknown that we really haven’t had time to search and compare,” Evans said.
Evans estimates that roughly 75 percent of veterinary clinics already provide insurance to their employees. He said he has sent out rate quotes to more than 500 clinics, which includes 1,600 or 1,700 people when you count dependents, and he can attest first hand that the confusion has been overwhelming.
"Even though we’ve spent the last year trying to get ready for this, so much of the really important information wasn’t available to us,” Evans said in early November. "And that government website, healthcare.gov, that thing is essentially worthless.”
Evans said premiums being quoted on the site often come out to half of what they will actually be when insurance seekers sign up.
Bottom line, according to Lorraine List of Summit Veterinary Advisors in Littleton, Colo., is that it’s going to be a real challenge for veterinary practices to figure out which set of rules apply to them and what choices they and their employees actually have.
"In the meantime, both veterinary practices and their employees need to monitor the changing health care environment and expect some challenges as the law is implemented,” she said.
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